Baltic card market has space for growth

Latvia is outpacing Estonia and Lithuania in the number of credit and debit cards issued as of the end of 2001.

Latvian banks have issued about 1 million cards so far. In Estonia, banks have issued 987,000 payment cards, while in Lithuania the number was 894,000 cards.

In seven countries in Central and Eastern Europe the number of payment cards issued by late 2001 topped 32 million. Poland led with 12.8 million cards, followed by Hungary with 4.7 million and Russia with 4.1 million.

But in the number of cards issued per person, Estonia is the undisputed leader. Estonian banks issued 0.65 payment cards per resident. Croatia was second with 0.47 cards, followed by Hungary with 0.44 per resident. Latvia was fourth with 0.43 cards per resident, while only 0.25 payment cards were issued per resident in Lithuania.

"Therefore, the best prospects in the future are Poland and Lithuania," said Ugis Zemturis, vice president of Hansabanka.

With Lithuania's population of 3.4 million people, "they will become the Baltic payment card leader in the future," Zemturis said.

In Latvia there is currently room for about 1 million more cards, he believes.

Debit cards are currently far more popular in the Baltics than credit cards. Roughly 90 percent of the payment cards issued in Latvia are debit cards and they are used mostly for cash withdrawals, not purchases.

Latvia also led the Baltic states with 784 automated-teller machines. Lithuania currently has 684 machines and Estonia has 680 ATMs.

Baltic banks are also preparing to issue chip cards, which allow greater security and more data to be stored on cards.

The drawback is that they are expensive to produce and require different processing equipment.

"It requires huge investments," said Zemturis. "We are preparing for them, but they are not our main priority."