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Card payments in Taiwan to grow by 15.2% in 2021, says GlobalData

October 14, 2021 Financial No Comments

Taiwan’s payment card market, which sustained growth for the past few years, registered a slump in 2020 due to the COVID-19 pandemic. However, with gradual recovery in economic conditions and rise in consumer and commercial spending, the market is expected to rebound strongly by 15.2% in 2021, forecasts GlobalData, a leading data and analytics company.

According to GlobalData’s Payment Cards Analytics, the value of card payments registered a decline of 6.3% in 2020. With consumer and commercial activities gathering pace, the card payments market is set to reach TWD3.7 trillion (US$130.6bn) in 2021. This is anticipated to further increase at a compound annual growth rate (CAGR) of 9.5% to reach TWD5.3 trillion (US$187.7bn) in 2025.

Taiwan is among few nations that has handled the COVID-19 pandemic effectively with total death count standing at 846 as of 11 October 2021, much lower compared to other Asian nations. The proper COVID-19 management and the opening of businesses is bringing the economic activity back on track, thereby positively affecting card payments.

Nikhil Reddy, Payments Senior Analyst at GlobalData, comments: “Taiwan has a robust card market with high card penetration with each individual having on average seven cards. The pandemic has further highlighted the importance of non-cash payments which is expected to drive card payments growth.”

The Taiwanese payment market has been witnessing a gradual shift towards digital payments, particularly payment cards. This is becoming more prevalent now as people are avoiding cash payments for the fear of transmitting COVID-19 virus. As a result, card payments will increase in 2021, while cash withdrawals using cards will decline, a trend that is anticipated to continue over the next four years.

To boost consumption and drive credit card spending, the government in 2020 launched ‘triple stimulus voucher’ program allowing consumers to earn cash back worth TWD2,000 (US$71.20) on credit card purchases. A similar program called Quintuple Stimulus Voucher program was launched in September 2021, which will run until April 2022, offering cash back worth TWD5,000 (US$178.01) on purchases using payment cards.

To support card acceptance among smaller merchants, payment companies are launching innovative low-cost payment acceptance solutions. Global Payments, a payment services provider, launched Mobile Tap in Taiwan in August 2021, allowing merchants to accept contactless payments through NFC-enabled Android mobile phones without the need for POS terminal or card reader.

Mr Reddy concludes: “Although Taiwan’s economy remained resilient from the outbreak of the COVID-19 pandemic, the overall consumer spending contracted and subsequently hampered the card payments. However, the market is now set to grow at a robust pace over the next four years, supported by strong payments infrastructure, growing preference for electronic payments, and government incentives.”

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