Payments Snapshot in Taiwan - Coronavirus (COVID-19) Sector Impact

Payments Snapshot in Taiwan - Coronavirus (COVID-19) Sector Impact

Summary

The Coronavirus (SARS-CoV-2) outbreak, dubbed COVID-19, is first and foremost a human tragedy, affecting millions of people globally. The contagious Coronavirus, which broke out at the close of 2019, has led to a medical emergency across the world, with the World Health Organization officially declaring the novel Coronavirus a pandemic on March 11, 2020.

While the island nation has not imposed any lockdown, its significant trade exposure to China is hurting its economy. The central bank has lowered the country’s GDP growth forecast for 2020 to 1.52%, down from the previous estimate of 1.92% in March 2020, due to a decrease in domestic consumption and exports in the first half of the year. However, as the country moves towards normalization, a gradual recovery will come in the second half of the year, benefiting the payments industry.

In response to the economic fallout of the COVID-19 outbreak, on April 2, 2020 the government announced an expanded stimulus package - taking the total to TWD1.05tn ($35.1bn). The package includes TWD81.6bn ($2.7bn) in subsidies for businesses to prevent job losses. The government also allocated TWD700bn ($23.4bn) in loans to businesses affected by the pandemic.

This report focuses on the impact of the coronavirus outbreak on both the economyand the cards and payments industry in Taiwan. Based on our proprietary datasets, the snapshotprovides a detailed comparison between pre-COVID-19 forecasts andrevised forecasts of total payment card, debit card, and credit card transactions by value and volume. It also offers information on measures taken by the government to combat coronavirus.

Scope

• The pandemic is expected to have a significant impact on the country’s tourism and travel industry, with the government suspending all inbound and outbound tours operated by Taiwanese travel agencies until the end of May 2020. Reduced travel spending will also have a negative impact on the cards and payments industry. According to the publisher's 2019 Banking and Payments Survey, travel and accommodation accounts for 29% of total credit card transaction value.
• Online spending is also likely to surge as wary consumers are staying home and using online channels to purchase goods. To avoid public contact and due to fears of shortages, consumers are increasingly opting for online channels in order to purchase daily essentials. Online payment solutions such as Alipay, JKoPay, and PayPal are likely to benefit from this trend.
• Cash remains the most popular payment instrument in Taiwan, accounting for 68.8% of the total transaction volume in 2019. However, the share of cash payments will decline as a direct result of the pandemic. Consumers who fear exposure to disease vectors in stores will opt for electronic (and specifically non-contact) transaction methods. That said, the risk in Taiwan is lower than in many other countries, so the effect on cash usage will be less pronounced.

Reasons to Buy

• Make strategic decisions using top-level revised forecast data on the Taiwanese payment industry.
• Understand the key market trends, challenges, and opportunities in the Taiwanese cards and payments industry.
• Receive a comprehensive insight into payments market in Taiwan.