Interesting Results from MasterIndex 08 Report

Last week, I had opportunity to get a copy of Mastercard’s MasterIndex August 2008 report. It s a report of a detailed research which has been done 2 times a year on 1.000 candidates. What s good for me was to see the recent payment behaviour of the people in Turkey. As it’s a confidential report, I would like to specify the interesting results rather than publishing the report.

Besides, the report is in Turkish, better to translate it According to the report, the number of people who think the best place for their savings is “under the mattress” (term reference : BBC News) has risen to 11% where foreign exchange alternative following with 8%. But am sure in the crisis environment the saving behaviour of people will be changing probably. Less investment instruments and more under mattress and gold savings. We will see what happens. The high level investment behaviour is still the same. 40% of people would like to use their money for real estate investments.

If we look at the consuming behaviour of Turkish people, we ll see the sharp increase in credit card usage. In the last 5 years, the usage of credit cards in Turkey has increased by more than 100%. Comparing with 2003 (usage : twice a month), the candidates using their credit cards twice a week is the majority in 2008. The volume of the credit card usage is increasing as the socio economic level decreases.

Moreover, 70% of the people use their credit cards for clothing and supermarket shoppings. 75% of those candidates have never used e-commerce. Another question asked to the candidates is ” What if there s chance to pay with credit card instead of cash, where would you choose ?”. Answers are, in order, 36% vote for the bill payments, 17% taxi payments, 17% rent payments. So this results can lead the banks and government to study “deferred payment & credit issues” on these topics. Most of the Turkish people choose their credit cards according to the reliability of the bank. Interest rate and contribution fees are other important reasons while choosing the credit card type. 45% of people have 1, 27% have 2 and 17 have 3 credit cards where the average is 2 credit cards per person. Only that result is enough to show the installment love of Turkish people. The young professionals, aged between 25-34, are the most credit card users.

People mostly use the credit card in white goods shoppings. Clothing, furniture, supermarkets and e-commerce follows. In e-commerce sector, 11% of people pay by cash, 1% by debit card, 58% by credit card and 15% use alternative payment methods (should be searched). Therefore, it’s clear that online shopping bases on installments. This can be an important data for the alternative electronic&mobile payment providers. Also change of credit card usage frequency (from twice a month to twice a week) shows the reality of rapid growth of credit card numbers in last 5 years. I remember the days when the banks were yelling out to give out credit cards without consumer scoring results. 60% of people use credit cards where the amounts are between 20-250 Turkish Liras. This interval can show the average shopping amounts of people as well.

The results of online shopping behaviour shows the recent situation of Turkish e-commerce sector. 75% of people never use online shopping. Only 5% of the 25% online-shopper (1% of all) use e-commerce sites more than once in a month. Although, e-commerce giro reached $10 billion, still there s a great e-commerce potential in the future. In the net, 52% of people buy event tickets, 47% buy electronical goods, 42% buy flight tickets and trip reservations.

The answer to “Why credit cards” is quite clear that 90% of people say “Installments and Discounts” – price sensitive answers Bonus collecting is also a strong reason to use credit cards.

I tried to summarize the long credit card report and there are really some interesting and suggesting results, especially in online shopping and the reasons to use a credit card.

I am sure in the near future, the behaviour of consumers will be changing in payments. Mobile and internet service providers will be providing various types of payment models. But the behaviour of Turkish people is the determining factor here. Economically, low segment and poor people are the big majority in Turkey. At the same time people never stop buying clothing, furniture, white goods and shopping in supermarkets. Banks and their credit cards are still the kings in payments because they provide lots of discounts, promotions, campaigns and of course installments. The mobile payment providers entering the Turkey market must be analysing these topics so carefully and catching the Y & Z generation’s payments. A solution with a mobile phone can boom the market as the penetration of mobile usage is so much more than the penetration of banked population. But just easy, reliable, quick and well-designed solutions will survive, I guess.