Payment Cards in Europe. the Return of Nation-States

Against the expectation that in a global world a few multinational credit and debit cards will dominate, payment card markets show surprising national variation. In countries like Hungary or the Czech Republic, banks issue no domestic credit or debit cards. In Denmark and Belarus domestic cards dominate (Dankort and Belcart, respectively). In Russia, there is a mix of domestic and international cards, but the government wants to marginalize Visa and MasterCard in favor of a new national card. The Single Euro Payment Area is working on its own payment card scheme. As states recognize that electronic payment is a source of information on the economy and citizens, they are less and less willing to hand control to US-based multinationals over money and people.  We separate fresh and mature markets depending on when the multinational brands entered the national scene, and explore the variation in nations steering a course between the two extremes: letting global brands completely take over their consumer payment system or opting for a national payment card. We draw attention to the role of timing, size of the domestic market, strength and resources of the states, nature of the banking community (relative size of banks, their strength vis-à-vis the state and competitiveness) and the degree of country’s political regional or global integration. Using World Bank microdata we look at differences in the way cards are used in various types of markets.