22 Jul 2020
Posted in Banking
Taiwanese payment cards market growth expected to sustain the COVID-19 outbreak, says GlobalData
Taiwan is among least affected nations from the outbreak of COVID-19 pandemic. With the government introducing comprehensive stimulus measures and easing international travel restrictions, a rise in consumer spending is expected which will in turn drive growth in card payments, says GlobalData, a leading data and analytics company.
According to GlobalData revised forecasts, the value of card payments in Taiwan is estimated to grow by 5.6% in 2020. The value is expected to reach TWD6.0 trillion (US$200.2bn) by 2024 increasing at a compound annual growth rate (CAGR) of 7.6% between 2020 and 2024.
Nikhil Reddy, Banking and Payments Analyst at GlobalData, comments: “Despite having a high card penetration of 6.5 per person, frequency for card payments remains very low in Taiwan at just 8.5 transactions per card per year in 2019. This is due to a strong inclination towards cash for day-to-day transactions. However, fears of the virus spreading through cash and government measures supporting electronic payments are likely to push card payments.”
To boost consumer spending, the government launched ‘triple stimulus’ program that allows people to buy TWD3,000 ($100.19) worth for TWD1,000 ($33.40). Individuals holding credit cards from 38 participating banks can register for this program. On spending TWD3,000 ($100.19) between July 15 and December 31, 2020 via the registered credit card, TWD2,000 ($66.79) will be credited back as cashback on credit card account. This program is anticipated to help boost card payments transactions.
Further growth in e-commerce spend is also expected to benefit card payments, with credit and debit cards collectively accounting for a quarter of e-commerce payments in the country. E-commerce spending is expected to grow by 11.6% in 2020 compared to the earlier forecast of 9.7% as consumer are shifting to online purchase to avoid exposing themselves to disease vectors.
Reddy concludes: “Taiwan has traditionally been a cash-based economy. While the current pandemic has made cashless transactions more preferable, the country’s well-developed payment infrastructure will support its long term growth.”