Hungary’s card payments market, which has registered sustained growth for the past few years, is set to increase by 13.3% in 2021, according to GlobalData, a leading data and analytics company.
Ravi Sharma, Lead Banking and Payments Analyst at GlobalData, comments: “Although Hungary is traditionally a cash-dominated society, payment cards are gaining popularity at the expense of cash. The rising banked population, improvement in POS infrastructure, growing adoption of contactless cards, and government efforts to boost financial inclusion have contributed to the growth of the payment card market. The COVID-19 pandemic has also highlighted the importance of usage of non-cash payments, thereby pushing the use of card payments in the country.”
As cashless payments have increased in popularity due to COVID-19, payment cards have been the beneficiary. The pandemic has made online purchasing more appealing as it allows consumers to avoid close social contact and helps to prevent the spread of the virus and this has driven the use of payment cards online. As per MNB, the volume and value of online card purchases (including domestic and cross-border) increased by 43% and 50% respectively in Q2 2020, compared to Q2 2019.
Additionally, when shopping in-store, consumers have shifted from cash payments to digital payments, particularly contactless cards. To support this, in March 2020, the Hungarian Government raised the contactless payment limit without the use of a PIN in the country from HUF5,000 ($16.86) to HUF15,000 ($50.58) to make it easier for consumers to make payments without coming into close contact with POS terminals.
Mr Sharma adds: “Hungary’s card payments market registered robust growth even during the pandemic. With gradual economic recovery, rising e-commerce and contactless adoption, the card payments market is expected to grow further at a compound annual growth rate (CAGR) of 10.7% between 2021 and 2025 to reach HUF15 trillion (US$50.7bn) in 2025.”