Thailand is among the worst affected Southeast Asian countries by the COVID-19 pandemic. Payment card transactions value, which registered robust growth in the last few years, declined by 11.7% in 2020, as consumer spending declined. The decline is likely to continue in 2021 as well due to ‘third wave’. As a result, the country’s payment cards market is forecasted to rebound from 2023, according to GlobalData, a leading data and analytics company.
According to GlobalData’s Payment Cards Analytics, reduced income levels and uncertain economic conditions are pushing consumers to cut down on spending, resulting in reduced card usage. Consequently, card payments value in Thailand is estimated to decline by 3.5% to reach THB1.6 trillion (US$54.6bn) in 2021.
Nikhil Reddy, Senior Payments Analyst at GlobalData, comments: “Thai economy has been severely affected by the COVID-19 pandemic with its GDP contracting by 6.1% in 2020. As Thailand is currently struggling to contain the third wave, recovery in card payments looks uncertain at least by end of 2022.”
Due to resurgence in new cases, the central bank of Thailand has revised downward its GDP forecast for 2021, from 1.8% released in July 2021 to 0.7% in its August 2021 estimates.
Credit and charge cards are the most preferred card types for payments in Thailand primarily due to the reward benefits such as discounts and cashback, and installment payment facilities offered on these cards. These cards account for 88.7% of all card payments by value in 2021. Debit cards account for the remaining 11.3% share.
Lockdown and travel restrictions have affected consumer spend on merchants such as airlines, hotels, restaurants, and transportation, which in turn resulted in reduced credit and charge cards’ usage.
Mr Reddy concludes: “The COVID-19 pandemic has severely impacted Thai card payments market, which saw robust growth until 2019. However, uncertainty still looms over the country’s payment cards market, which may not reach its pre-COVID levels anytime soon.”