작성일자: 2013.11.19

작성자: 프라하 무역관 Mr. Martin Jirovec, 박정현 (jhpark1@kotra.cz)

 

 

1. Market size and trend

 

□ Czech market of ATMs is connected to the financial market (credit cards) which has been developing very quickly according to the general economic changes after 1989 connected to the transition from command to market economy. The Czech banking system has changed - the role of the Central bank and new commercial institutions has been founded, which lead to the creation of the new system which is similar to the developed Europeans financial markets.

 

□ The ATM market has been formed by MUZO(today Global Payment) company which has secured the construction of card authorizing centre and tenders for supply of ATMs and POS.

 

□ Up today there are 58 credit institutions formed by banks (44) and credit unions (14). Credit unions issue credit cards as non-banking institutions. The statistic data displayed in the Chart 1 below concern 20 banking and 5 non-banking subjects (CCS, Cetelem, Diners Club and Euronet, American Express) which make their data publicly attainable.

 

□ Number of 44 banks stated above involves also recently established banking institutions operating for no more than two years by now. These banks are: Air Bank a.s., FIO banka, ZUNO Bank and EQUA bank.

 

Chart 1: Deposited capital (in CZK) of main banking and non-banking subjects in the Czech Republic

Name of the bank	Deposited capital (in CZK)
Air Bank, a.s. (PPF Group)	500,004,000
AXA Bank Europe	n/a
CETELEM ČR, a.s.	180,000,000
CITFIN - Finanční trhy, a.s.	22,000,000
Citibank Europe	n/a
COMMERZBANK AG, Prague branch	n/a
Česká spořitelna, a.s.	15,200,000,000
ČSOB	5,855,000,000
Deutsche Bank AG, Prague branch	n/a
Equa Bank, a.s.	2,260,000,000
FIO banka	560,000,000
GE Money Bank, a.s.	510,000,000
ING Commercial Banking	n/a
J &T Banka	3,358,127,000
Komerční banka, a.s.	19,004,926,000
LBBW Banka CZ	1,708,700,000
mBank (BRE Bank S.A.)	n/a
PPF banka	769,004,327
Raiffeisenbank, a.s.	9,357,000,000
Raiffeisenbank im Stiftland eG	n/a
Sberbank CZ, a.s.	2,005,380,000
Unicredit Bank a.s. Czech Republic	5,124,716,000
CCS - Česká společnost pro platební karty, a.s.	52,920,000
Diners Club CS, s.r.o.	n/a
ESSOX s.r.o.	2,288,086,000
EURONET Services s.r.o.	169,990,000
Home Credit a.s.	300,000,000
ZUNO BANK AG	n/a
American Express s.r.o.	150,100,000

Source: Bank Cards Association (SBK), 2013

 

□ The first ATM device was installed in the Czech Republic in December 1989 and was not offered for the general public, but only for the saving bank employees. Consequently, the ATM utilization was offered to broader area of users. The Czech ATM net has an advantage in comparison to the western European countries with ATM tradition - Czech net is younger, so the bank can provide the same or better services to customers.

 

□ The ATM market itself has been developing continuously since its establishment in early 90’s. In 2007 the number of ATMs exceeded 3,500 in the whole Czech Republic. Nowadays there are 4,299 ATMs and this machines offer more functions for the users, not just money withdrawal but also  bank account status displaying, payments for cheques, bills, mobiles, PIN change, infolimit (how much customer can loan from a bank), banking products promotion etc. The new innovation is depositing money via ATMs. As you can see in the chart and also graph below the ATM market has promising future development.

 

Chart 2: Number of ATMs in the years 2001~2012

Year	2001	2002	2003	2004	2005	2006
Number of ATMs	1,909	2,350	2,699	2,850	2,892	3,096

 

Year	2007	2008	2009	2010	2011	2012
Number of ATMs	3,599	3,534	3,679	3,868	4,082	4,299

Source: Bank Cards Association (SBK), 2013

 

Graph 1: Number of ATMs in the years 2001~2012

Source: Bank Cards Association (SBK), 2013

 

□ In general we have two different types of ATMs in Czech Republic - indoor and outdoor ATMs. The main difference between them is in the thermo stability. Indoor ATMs are designed for the lowest temperature about +5 degrees Celsius, the outdoor types for -20 degrees Celsius.  Both types can be installed in a wall or in free area.

 

□ Both types are used by bank. Banks have focused primarily on in-house ATM from the beginning. After installing ATMs in the branches they have developed the outdoor net. Most common types used are Walk Up model and Lobby model.  Nowadays the banks concentrate on the relationship with customer so they develop the branches net and search for new possibilities and products. According to the experts from the bank sector, the ATMs are not the main target nowadays so the market is stable and in the nearest future no big changes are expected. On the other hand the number of ATMs has still been rising.

 

□ One of the main parameters of banking infrastructure is the ATM density per 1 mil. inhabitants. The Czech Republic, from the information mentioned above, has got 429.9 ATMs/1 mil. inhabitants, whereas in 2008 the number was only 353 ATMs/1 mil. inhabitants. For comparison, most ATMs in this category has got Spain – 1,350.

 

□ ATM net providers

 

 ○ Nowadays the ATMs are controlled by several providers, either big banks or independent providers of specialized services (operating ATMs for individual banks) or specialized companies. The biggest provider of ATMs is Global Payments Europe which runs more than 2,000 ATMs, POS and other cash dispenser machines. Ceska sporitelna is the only bank institution which runs the net of its 1,481 ATMs itself. The other banks are outsourcing ATMs from specialized companies (Global Payments Europe, Euronet Worldwide, Pharro), which leads to the higher payments for withdrawal, because it is the main profit for these companies.

 

Chart 3: ATM net providers

Company	Founded in	No. of ATMs
Ceska Sporitelna	1825	1,481 (2012)
Global Payments Europe (former MUZO, founded 1990)	2004	over 2,000 (2008)
Euronet Worldwide	1997	over 150 (2008)
Pharro	2004	over 100 (2008)

Source: Bank Cards Association (SBK), 2013

 

Chart 4: Banks with more than 100 ATMs

Bank	No. of ATMs
Ceska sporitelna	1,481 (2012)
CSOB	831 (2011)
Komercni Banka	702 (2012)
GE Money	600 (2012)
Raiffeisenbank	>150 (2012)

Source: Bank Cards Association (SBK), 2013

 

 ○ Volume of cash withdrawals from ATMs grew more rapidly than the increase of number of transaction, therefore the value of average withdrawal changed from 2,105 CZK in 2000 to 3,656 CZK in 2012 (the increase was definitely influenced by introduction of higher cash advance fee from ATMs operated by other provider then the issuing bank).

 

Graph 2: Number and volume of ATM cash withdrawals in the years 2001~2012

Source: Bank Cards Association (SBK), 2013

 

□ Cards

 

 ○ Growth of card popularity in the Czech Republic is documented by the graph (and chart) of card number growth during the last 11 years (2001~2011). There have been issued domestic, international, debit, credit and charge cards. Since 1998 banks have started to issue credit cards generating higher yields then debit cards; benefiting in reducing costs and increasing client's comfort in cash retrieval. At the beginning these cards were issued with magnetic stripe technology and since 1999 also as chip cards (IPB bank issued the "MAX card" as the first domestic chip card as well as the first international chip card Maestro under MasterCard association). Moreover, at first an instrument for cash withdrawals has gradually become to be an effective mean for cashless payments. Nowadays, all the cards have been issued with chip EMV (Europay-MasterCard-Visa Standard) technology.

 

 ○ In 2011, there appeared a new card type, so called contactless card which uses the Near Field Communication technology. This payment system is becoming to be very popular among the Czech customers because of their fast and simple utilization. The first contactless card was issued by Citibank. Since then, more than 2.5 mil. contactless credit and debit cards have been issued in the Czech Republic. Concerning the practical use of such card type, when the purchase cost is lower than approximately 25 USD (500 CZK), there is no need to enter the PIN code. If the value is higher, the user must enter his PIN code. Nowadays, there are used approximately 23,000 contactless terminals, mostly in shopping centers, supermarkets, grocery shops, cinemas, coffee shops etc. There are 12 banks which issue contactless cards (all major banks are included). The most famous card companies which produce contactless cards are ExpressPay from American Express, Discover Network Zip, MasterCard PayPass and Visa payWave.

 

 ○ Standards for utilization of this new card type are set by the NFC Forum organization established by Nokia, Philips and Sony in 2004. Those standards are the part of ISO/IEC 18092 and ISO/IEC 14443 certification.

 

Chart 5: Number of cards issued in the Czech Republic during the years 2001~2012

Issued cards	2001	2002	2003	2004	2005	2006
Cards total	4,658,902	5,296,067	6,373,591	6,867,733	7,390,357	7,865,453
Debit	4,504,285	5,194,057	5,829,857	5,873,728	6,418,446	6,602,775
Credit	48,520	97,629	203,274	372,933	614,542	885,266
Charge	2,097	4,025	335,269	327,115	357,369	377,412

 

Issued cards	2007	2008	2009	2010	2011	2012
Cards total	8,623,124	8,931,872	9,054,308	9,268,914	10,030,193	9,853,681
Debit	6,974,147	7,220,667	7,372,327	7,400,919	7,454,543	7,533,938
Credit	1,212,401	1,276,714	1,224,814	1,564,430	2,288,981	2,073,352
Charge	436,576	434,491	457,167	303,565	286,669	246,388

   Source: Bank Cards Association (SBK), 2013

 

 ○ Recalculated annual card increase according to the CAGR parameter for specified years corresponds to the value of 50.61. In the Graph 3 a permanent increase of inhabitants which succumbed to wander of payment colorful card is apparent. In comparison to the year 2001, the number of issued cards has increased to 212%. The reason of this significant increase of cards is given by the fact that the number of banks which issue cards has increased as well; from 13 in the year 2000 to 20 in the year 2012. Another reason to explain this trend is that the major banks have become to be dual banks, which means that they issue the cards under the brand of both associations VISA and MasterCard. The year 2003 was a breaking year in charge and credit cards issuance, when number of share cards rapidly increased, and immediately from the next year, 2004, the number of credit cards permanently exceeded number of charge cards.

 

Graph 3: The development of the amount of cards in the Czech Republic in the years 2001~2012

Source: Bank Cards Association (SBK), 2013

 

 ○ Number of transactions and amounts of transactions done through the ATMs in the Czech Republic in 2008 (according to card types) could be seen in the graphs below (please note that because of the unavailability of new data for the year 2012, for general depiction we used available data from 2008).

 

Graph 4: Number of transactions in ATM sorted by card brands in the Czech Republic in 2008

Source: Bank Cards Association (SBK), 2009

 

Graph 5: Volume of transactions through ATM in the Czech Republic in 2008

            (Unit: thousands CZK)

Source: Bank Cards Association (SBK), 2009

 

 ○ Despite the improvements in cashless payments system and continuous widening of services (cash back, etc.), the experts see promising future for ATMs in the Czech Republic. Especially the new innovations like internet connection, money deposit, biometrics security, optical cards, cheques pay-off, changing of PIN, charities donations, games and promotion; those are examples of several innovations securing the survival of ATMs.

 

 

2. Imports and Exports

 

 ○ The following graph and charts depict the situation for import/export of ATMs (HS Code 84729030). All the values are for the whole year except still ongoing year 2013, where only statistics from January till September 2013 are available. As depicted on the detailed Chart 6, the main importing countries in this product category are Germany, Hungary, United Kingdom and Japan.

 

Graph 6: Import and export of ATMs (HS Code 84729030) in the Czech Republic in 2009~2013

            (Unit: thousands USD)

Source: Czech Statistical Office, 2013

 

Chart 6: Import statistics for ATM (HS Code 84729030) in the last 5 years

Country	Stat. value USD (ths.)
	2009	2010	2011	2012	2013
Hungary	2,870	4,234	3,305	4,202	3,074
Germany	1,409	3,663	6,403	6,513	2,894
United Kingdom	n/a	1,323	415	740	n/a
Japan	95	220	100	499	386
China (Peoples Republic of)	113	236	124	364	58
Austria	14	59	89	301	73
Slovakia	n/a	n/a	230	n/a	3
Italy	99	n/a	n/a	n/a	n/a
Korea	n/a	n/a	27	n/a	n/a
Russian Federation	n/a	n/a	n/a	14	n/a
Ireland	n/a	11	n/a	n/a	n/a
Singapore	7	1	n/a	n/a	n/a
United States of America	n/a	0	n/a	7	n/a
Spain	n/a	2	1	n/a	n/a
Total	4,607	9,749	10,694	12,640	6,488

Source: Czech Statistical Office, 2013

 

 ○ The Czech exports ATMs mainly to Slovakia (mainly because of the focus of the Czech companies on the neighbouring market as well) and has made some shipments to countries like Ukraine, Equatorial Guinea, Rwanda, Russia and Poland.

 

 

3. Import barriers and regulations

 

The European Union doesn´t impose any duties, special barriers or restrictions for import of ATMs from Korea.    · Duty rate: 0%  · VAT Rate: 21%

 

□ EMV standard

 

 ○ The regulations are given by banks and card providers (VISA and Maestro). The companies require ATMs with EMV standard (Europay-MasterCard-Visa Standard is a standard for interoperation of IC cards ("Chip cards") and IC capable POS terminals and ATMs, for authenticating credit and debit card payments). The EMV standard defines the interaction at the physical, electrical, data and application levels between IC cards and IC card processing devices for financial transactions. Portions of the standard are heavily based on the IC Chip card interface defined in ISO 7816. Recognition of compliance with the EMV standard (i.e. device certification) is issued by EMVCo following submission of results of testing performed by an accredited testing house. EMV Compliance testing has two levels: EMV Level 1 which covers physical, electrical and transport level interfaces, and EMV Level 2 which covers payment application selection and credit financial transaction processing. After passing a common EMVCo tests the software must be tested to comply with EMV standard (VISA VSDC, MasterCard MChip etc.) The latest version EMV 4.3 has became effective since 2011.

 

□ SEPA regulation

 

 ○ Regulation that has connection to ATM is called SEPA (Single European Payment Area). SEPA Cards Framework recognizes that a three-tier model is essential to progress the deployment of SCF compliant payment transactions and ATM withdrawals with cards. The Framework is aimed at building an environment in which there are neither technical nor legal or commercial barriers which stand in the way of cardholders, banks and merchants choosing and using SCF compliant payment and ATM access card products. Each of the parties should be able to make a choice based on value considerations alone whether they wish to adopt a particular card product or brand, and have this choice fully supported by technical interoperability, and not constrained by lack of pan-European acceptance. Between now and end 2010, the date by which all payment card products and brands falling within the scope of this Framework will have become SCF compliant. All ATMs will offer English as well as the national languages(s) and any other languages regarded as appropriate by the ATM owner.

 

 ○ In order to deliver on the scope of this Framework, and to meet cardholders’ and merchants’ expectations across SEPA, each bank needs to decide which option(s) it will implement from 1. January 2008 onwards. After end 2010 no card scheme designed exclusively for use in a single country should operate anymore for POS and ATM transactions.

 

 ○ The ATM has to conform with ISO 7810 and 7816; and has to know the OCR 7B (optical character recognition of font standard)

 

 

4. Competition

 

 ○ In general the Czech market is quite competitive because one of the biggest producers (Diebolt) is pulling back from the market. There are no regulations for ATMs nevertheless the banks and customers demand certificates (EMV). The ATM producers should have ISO certificate (7810 and 7816) and CE mark as a standard within tenders and decision making, experts have also mentioned that very important are certificates from international card providers like VISA or MASTERCARD which cost about 150 ths. USD.

 

 ○ Experts have estimated the Czech market is controlled by 2 worldwide producers - Wincor Nixdorf and NCR. Those companies should possess about 90% of the whole market (leader NCR almost 50% of the market, Wincor Nixdorf over 40%). The other producers participating in the Czech Republic via distributors are Diebolt, IBM, Olivetti.

 

 

5. Distribution

 

 ○ The distribution of ATMs is solved in the Czech Republic mainly via providers. All companies secure their distribution politics and distribution contracts. The biggest is Global Payments Europe (former MUZO), followed by companies Euronet Services and Pharro. Those companies provide services and care to bank´s ATMs (nets, terminals, etc.) in the Czech Republic.

 

 ○ Access to Euronet owned and branded ATMs is provided through bilateral agreements with domestic financial institutions and individual countries or via international card organizations networks such as Visa or MasterCard.

 

 ○ Pharro is seeking for new convenient spaces for new ATMs. They offer special contract - the negotiated price (for rent) depends on the attractiveness of a place.

 

 ○ There are several distributors of parking systems and other ticket issuing systems. For example, mentioned company GREEN Center, which specializes in the first named parking systems.

 

 

6. Pricing

 

 ○ Unfortunately, the ATM manufacturers don´t reveal their prices. Searching the internet some price range has been settled. The price depends on the type of an ATM and its functions; lifetime estimated 8~10 years. In general, it can be stated that the lowest price is around 17,500 USD for the simple ATM. The highest price could be more than 100,000 USD.