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Lebanon Country Report

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  • Published Date: June 2018

LEBANON CARDS & PAYMENTS REPORT

A comprehensive overview of the cards, payments and consumer banking market in Lebanon. Like most Middle Eastern countries, Lebanon is a cash-dominated society. Cash is often used for payments at small businesses. However, the payment cards market is also developing significantly. Banks are aggressively improving their technology infrastructure to gain competitive advantage and to support the growth of the payment cards market.
Premium credit cards are more common in Lebanon than in some other countries in the Levant and credit card spending on these cards is around six times higher than that on standard credit cards. Visa, Mastercard and American Express are the major card networks in Lebanon. Visa is still the leading debit cards network in the country and has gained market share over Mastercard as some of the issuers migrated their debit card base to Visa.
Areeba is the largest merchant acquirer in Lebanon, with an estimated market share of 50 percent in terms of credit card acquired billed volume.

LEBANON COUNTRY REPORT | KEY FACTS

  • Lebanon has a competitive retail banking industry led by domestic banks. However, only half of all adults have a bank account.
  • Unlike other Middle Eastern countries, mortgage loans constitute a significant share of total consumer lending, representing around 61 per cent of total consumer credit outstandings at the end of 2017.
  • Lebanon's central bank introduced new regulations in late 2014 which set minimum down-payments and capped monthly repayments relative to income on housing and car loans.
  • Lebanon remains a cash-dominated society, however, payment card penetration (including credit, debit and e-money cards) increased to 78 cards per 100 adults in 2017, up from 59 in 2011.
  • Debit cards are used primarily to withdraw cash. ATM transactions accounted for 81 per cent of debit card billed volume and 69 per cent of the number of transactions in 2017.
  • In common with other markets in the Middle East, credit card issuers in Lebanon are focused on the premium segment. Spending on Premium cards is around six times higher than that on standard credit cards.
  • During 2017, an estimated 65 per cent of total credit card billed volume originated from Premium cardholders.
  • Profit per card in Lebanon was estimated at $161 in 2017. Credit losses are low as the majority of credit cards are linked to salary accounts.
  • Due to their association with money laundering and terrorist financing, the central bank banned the issue of prepaid cards in 2016 with the exception of cards linked to a bank account and issued to an identifiable individual.
  • Bank Audi is the leading issuer and acquirer of credit and debit cards in Lebanon.

Lebanon Payments Research | Report Contents

TABLE OF CONTENTS
Demographics and Economy
Outlines the key metrics and trends which influence the development of retail banking and payments in the country:

  • Population structure
  • Income
  • Mobile and internet use
  • Economic data

Retail Banking
Explores the structure of the local banking system, its infrastructure and the leading players. Data includes:

  • Aggregate retail banking indicators
  • Bank branch, ATMs and POS terminals
  • The profitability of top banks

Consumer Finance
Overview of consumer finance in the country. Categories analysed include:

  • Mortgage loans
  • Personal loans
  • Credit card loans
  • Vehicle loans

Credit Cards
Industry-leading credit card coverage. We detail the past present and future of the industry through our data and commentary, including:

  • Market size split by consumer and commercial credit cards: number of cards, transaction volume, billed volume
  • Profit pool analysis
  • Competitive landscape: networks, issuers

Debit Cards

  • Market size: number of cards, transaction volume, billed volume
  • Competitive landscape: networks, issuers

Prepaid Cards

  • Market size: number of cards, transaction volume, billed volume

Lebanon Country Report | Selected Extracts

Demographics and Economy
Lebanon is a densely populated country with a population of 4.4 million people at the end of 2017, of which 75.5% were adults. The country's workforce constituted 48.8% of the total population. About an eighth of the total population are registered Palestinian refugees.

The Economy
Although the country has a free-market economy and a well-developed banking system, foreign investors' confidence has been deteriorating due to regional disturbances.

Retail Banking
At the end of 2017, there were 49 banks operating in the country. Lebanon's retail banking market is dominated by: BLOM Bank, Bank Audi, Fransabank, Byblos Bank, Bankmed and Bank of Beirut. These six banks accounted for an estimated 63% of the country's total banking assets.

Consumer Finance
Unlike other Middle Eastern countries, mortgage loans constitute a significant share of total consumer lending, representing around 61% of total consumer credit outstandings at the end of 2017.

Cards Market
Like most Middle Eastern countries, Lebanon is a cash-dominated society. Cash is often used for payments at small businesses. However, the payment cards market is also developing significantly. There were 1.5 million debit cards in circulation at the end of 2017, representing a penetration rate of 46 cards per 100 adults.

E-money
Lebanon is a leading contributor of the development of financial technology in the region. With a strong and stable banking system and a population keen to adopt new innovative technology, the country is an attractive market for fintech investments.

Profit pool
Oman has one of the smallest credit cards markets in the GCC region due to the small proportion of customers who are eligible for credit cards. This is reflected from the low credit card penetration rate in the country; the rate stood at seven cards per 100 adults in 2016.

Pricing and Enhancements
Credit card issuers in Lebanon have focused on rolling out Premium cards, loyalty programmes and rewards schemes as well as products targeted at specific segments of the market. Banks have also focused on encouraging credit card usage.

Card Networks
Visa, Mastercard and American Express are the major cards networks in Lebanon. Mastercard has dominated the country's credit cards network for the past decade with a market share of 61% in terms of the number of cards in circulation. Debit cards are more widespread than credit cards in Lebanon, with an estimated 1.5 million debit cards (compared to 670,177 credit cards) in the market at the end of 2017.

Key Retail Banks and Issuers
Although Lebanon has 49 registered banks, banking assets are concentrated at the top end of the market. The country's five largest banks collectively account for around 55% of total banking assets.

Merchant Acquiring and Processing
The merchant acquiring business in Lebanon has also come under strain from increasing interchange rates, due to a growing proportion of higher interchange-earning Premium cards in the total billed volume. The majority of issuers undertake their processing activities in-house, although many of the smaller credit card issuers are currently exploring the cost benefits of outsourcing.

Online Acquiring
The Lebanese e-commerce market is still at a nascent stage and continues to struggle with the challenges endemic to Middle Eastern markets: lack of secure online payment gateways and consumer mistrust of online purchasing.

Regulatory and Markets Information
The Banque du Liban is the central bank of Lebanon and acts as the regulator for the country's commercial banks, specialised banks, money exchange houses and finance and leasing companies. It also acts as the advisor for the government in economic matters in general and on monetary and financial issues.

MORE MIDDLE EAST PAYMENTS REPORTS

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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