Norwegian banks spot new opportunities in age-based segmentation for credit cards.
A group of Norwegian banks have discovered new opportunities in the card and payments industry. Driven by a large young generation and high online usage, tapping into the younger generation can be a profitable business.
The young generation in Norway is a considerable and growing target group in terms of card spending. In 2013 25.7% of Norway’s population was between the ages of 10-29 (1.2 million people). Banks in Norway have segmented the country’s young population into various age brackets such as 13 to 17 and 18 to 25, and offer a range of card products to tap into this significant population base.
One of the banks that have used new age-based segmentation is the Norwegian SpareBank 1. This bank offers Visa cards for children under 13 years old. The amount in the account can be controlled by parents; there is no insurance fee; and the card is free to use in stores and at SpareBank’s ATMs. The bank also offers a Visa Electron credit card for the population aged between 13 and 18 years old. This card has zero annual fees and is free to use for retail payments in Norway and abroad.
Norway has the highest number of internet users in Europe today. The growth in number of internet users has been driven by the demands of the country’s growing economy and the younger population. Growth in e-commerce, supported by an increased internet penetration, is expected to increase the use of debit, credit and charge cards for online shopping.
Norway’s overall cards and payments industry has seen nominal growth in recent years, increasing at a CAGR of 3.97%, from 15.34 million cards in 2008 to 17.9 million cards in 2012. According to a new report from Timetric, the industry is forecast to register further growth rising to 19.3 million cards by 2017.