17 Dec 2020
Posted in Banking
Card payments to rise in New Zealand following lifting of lockdown restrictions, says GlobalData
New Zealand is among the few countries globally that have been successful in combating the COVID-19 outbreak. With the government lifting lockdown restrictions, a rise in consumer and commercial spending is expected, which will push card payments, according to GlobalData, a leading data and analytics company.
An analysis of GlobalData’s Payment Cards Analytics reveals that the value of card payments in New Zealand is estimated to remain flat in 2020. However, this is expected to grow at a compound annual growth rate (CAGR) of 2.2% between 2020 and 2024 to reach NZ$97.9bn (US$66.0) in 2024.
New Zealand was one of the first countries to declare itself ‘COVID-19-free’ in the month of June but has recorded few cases since then. The number of active cases in New Zealand stands at 43 as of 16 December 2020 – much lower than other developed nations.
On 14 December, the New Zealand government lifted all lockdown restrictions. Citizens now do not need to follow social distancing norms. However, the country’s borders will remain closed for foreigners.
Ravi Sharma, Banking and Payments Lead Analyst at GlobalData, comments: “While the crisis caused contraction in the economy, it is gradually recovering as lockdown restrictions have been removed. This will boost consumer spending especially during the upcoming festive season which will provide push to card payments.”
One key trend witnessed in the recent time was the rise in contactless payments. Consumers were gradually shifting from cash to digital payments, particularly contactless cards, in a bid to avoid exposure to disease vectors such as cash and POS terminals. To encourage this shift away from cash, the government in April 2020 raised limit on contactless payment from NZ$80 ($53.96) to NZ$200 ($134.89).
Mr Sharma concludes: “Payments market growth in 2020 was hampered by the COVID-19 outbreak. However, it is expected to revive quickly with the complete removal of lockdown and social distancing restrictions ahead of festive season and is expected to continue to next year as well.”