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A comprehensive overview of cards, payments and retail banking in Jordan. A small country, the majority of Jordan's population is concentrated in urban centres like Amman (the capital city), Irbid and Zarqa. Jordan is still a cash-dominant society, with over 90 percent of the transactions being made in cash.
Premium card customers in Jordan are increasingly significant since growth in the credit cards market was predominantly because of them. Non-premium cardholders, especially those in the lower- to middle-income category, continued to curtail their credit card spending.
Visa is the clear market leader in the credit cards market in terms of both card numbers and billed volume. However, since 2011, Mastercard has become more aggressive and started increasing market share. Visa is the country's largest debit card network, representing a market share of 88 percent in terms of debit card billed volume in 2016.
The merchant acquiring market in Jordan is dominated by two main players: Emerging Market Payments (EMP) and Middle East Payment Services (MEPS).
TABLE OF CONTENTS
Demographics and Economy:
Outlines the key metrics and trends which influence the development of retail banking and payments in the country:
Explores the structure of the local banking system, its infrastructure and the leading players. Data includes:
Overview of consumer finance in the country. Categories analysed include:
Industry-leading credit card coverage. We detail the past present and future of the industry through our data and commentary, including:
Demographics and Economy
Jordan is not rich in natural resources; potash and phosphate are its main export commodities. An almost landlocked, semi-arid country, agricultural land is limited and water is severely scarce – the country ranks as the world's fourth-poorest country in terms of water resources.
The textile and garment sector is important to the Jordanian economy, as it accounts for one-third of the country's export earnings and employs 60,000. Jordan is gradually becoming a garments manufacturing hub for international brands including Calvin Klein and Tommy Hilfiger.
There were an estimated 25 banks operating in Jordan at the end of 2016. Five banks dominate Jordan's retail banking market: Arab Bank, The Housing Bank for Trade and Finance (HBTF), Jordan Islamic Bank (a subsidiary of Dallah Al Barka Group), Jordan Kuwait Bank and Bank AlEtihad.
Jordan's consumer credit market continued to grow steadily in 2016 with outstandings reaching an estimated $15.3 billion, up by 11.4% from the previous year. Growth in total consumer debt was largely due to the expansion in mortgage credit.
Jordan is still a cash-dominant society, with more than 90 percent of the transactions being made in cash. Due to the prevalence of cash-based transactions in the country, around two to three percent of GDP is spent on protection and maintenance of cash.
Mobile money services are at a nascent stage in Jordan with few players offering the service. Orange and Zain are two major mobile telecom operators that offer mobile financial services in the country.
The profitability per card for foreign banks is higher than that of local banks. This is primarily due to the higher credit card outstandings per card of their portfolios, higher rollover rates and a greater proportion of fee income in total credit card revenues. Lower cost to income ratio is another major factor behind higher profitability per card.
Pricing and Enhancements
Issuers have taken steps to grow credit card acceptance and encourage customers to use their cards for day-to-day purchases. Nevertheless, the credit cards market remains in an early stage of development in terms of product differentiation, variety of products and richness of features. Market competition is primarily based on pricing.
Visa is the clear market leader in the credit cards market in terms of both card numbers and billed volume. However, Mastercard has become more aggressive and started increasing market share. Visa's dominance of the debit cards market is attributed to its strong relationships with key issuers and its brand recognition in the country.
Key Retail Banks and Issuers
At the end of 2016, there were an estimated 25 retail banks operating in Jordan for a population of seven million. However, around 40% of total banking assets and around 35% of the branch network is held by the top three banks.
Merchant Acquiring and Processing
The merchant acquiring market in Jordan is dominated by two main players: Emerging Market Payments (EMP) and Middle East Payment Services (MEPS). Banks have made huge investments in IT and have deployed card personalisation infrastructures in-house. As a result, most credit card issuers have kept the issuing processing in-house.
Despite growth in internet and smartphone penetration, e-commerce in Jordan is still in its nascent stage. Major impediments to the growth of e-commerce include low levels of consumer confidence about making online purchases, poor consumer demand and the lack of a dedicated regulatory body governing e-commerce transactions.
Regulatory and Markets Information
The Central Bank of Jordan (CBJ) acts as a regulator for the country's commercial banks, specialised banks, money exchange houses and finance and leasing companies. It also acts as an advisor to the Jordanian government on economic matters in general and particularly on monetary and financial issues.
Reports deliver invaluable market and competitor intelligence on payments cards, e-money, acquiring/processing, retail banking, and consumer credit throughout the Middle East. Analysts and researchers use both primary and secondary source data and conduct in-depth interviews with senior industry executives and Middle East experts.
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