Boston, MA -- (SBWIRE) -- 10/08/2013 -- The Republic of Latvia is an open economy where exports contribute for almost one-third of the GDP. Latvia is a member of the United Nations (UN), European Union (EU) and International Monetary Fund (IMF). Latvia's economy was adversely affected by the eurozone crisis in 2009. While cash remains the dominant method of payment in Latvia, there have been concerted efforts from card issuers, the government and regulatory bodies to support card use. The nation's debit, prepaid and charge card categories have expanded rapidly. A large part of this growth has been driven by infrastructure improvements such as contactless technology and increased adoption of smartphones. All these factors have made payment cards far more accessible, resulting in moderate growth for the card payments channel. The channel registered a CAGR of 0.21% during the review period (2008-2012), and grew from 2.65 million cards in 2008 to 2.67 million in 2012. Over the forecast period (2013-2017), the channel is forecast to grow from 2.79 million cards in 2013 to 3.6 million in 2017, at a CAGR of 6.73%. The key drivers for this growth include a stable inflationary forecast, positive employment opportunities and an increasing volume of corporate and leisure travelers. Latvia is also expected to register high growth in terms of online and traditional retail revenues.

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Key Highlights

- In terms of number of cards in circulation, the Latvian card payments channel grew at a CAGR of 0.21% during the review period, from 2.65 million in 2008 to 2.67 million in 2012. The growth of the channel was supported by the improved banking infrastructure, significant internet and smartphone penetration, and growth of payment cards such as debit, prepaid and charge cards.
- Debit cards will remain the fastest-growing card category over the forecast period. In terms of number of cards in circulation, the category constituted 70.0% of the overall card payments channel in 2012. Its share is expected to increase to 54.0% by 2017. The debit card category is expected to grow at a CAGR of 0.78% over the forecast period.
- According to the World Travel and Tourism Council's 2013 figures, total expenditure on outbound travel in Latvia declined from LVL607.4 million in 2008 to LVL428.1 million following the eurozone crisis. Total expenditure on outbound travel, however, rose from LVL428.1 million in 2010 to LVL539.5 million in 2012. In Latvia, banks have increased the issuance of globally accepted credit and debit cards to meet cardholder requirements.
- According to Statistics Latvia, in 2011, there was a rise in online shopping as 14.1% of internet users in the country purchased products and services online. E-commerce has significant growth potential as around 70% of the total population in Latvia uses the internet for various purposes such as shopping, social media and use of online services.

Scope

Companies Mentioned in this Report: Swedbank, SEB Bank, Baltic International Bank, Danske Bank, Citadele

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