While cash remains the preferred payment method in Taiwan, its share in the country’s total payment volume is expected to decline from 69.1% in 2019 to 59.7% in 2023 due to the rising preference for electronic payments, according to GlobalData, a leading data and analytics company.

GlobalData’s report, ‘Taiwan Cards & Payments: Opportunities and Risks to 2023’, reveals that the overall card payment value in Taiwan increased at a compound annual growth rate of 8.7% during 2015–19 to reach TWD4.2 trillion (US$137bn). This value is expected to increase further to TWD5.7 trillion (US$186.9bn) by 2023.

Ravi Sharma, Payments Analyst at GlobalData, comments: “The concentrated government efforts to create a low-cash society, growing consumer preference for contactless payments and increased willingness from smaller businesses and sole traders to accept low-value payments all contributed to the payment cards growth.”

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In addition to payment cards, the government is also focusing on encouraging mobile-based payments in the country. In this regard, it aims to increase the percentage of mobile phone users who make mobile payments to 90% by 2025. The government is offering tax incentives to small businesses, allowing them to continue paying minimal business tax (1%) until 2020 as long as they provide mobile payment acceptance to their customers. The government estimates that 400,000 small businesses (equivalent to around one quarter of all SMEs in Taiwan) will benefit from the initiative.

The recent proliferation of mobile payment brands is also supporting the government’s efforts. Google Pay was launched in Taiwan in June 2017 (then named Android Pay), enabling users to make in-store and online payments while Apple Pay and Samsung Pay were also rolled out in the same year. Other brands such as Alipay, Pi, Jkopay and Taiwan Pay also have a presence in the market.

Sharma concludes: “While cash will continue to dominate the overall payment landscape for the foreseeable future, these measures will certainly drive electronic payments and bring down cash dependency in the long run.”