Asia Pacific Payscape 2021: Payment Policy Developments

March 2017

Asia Pacific is the largest region globally by card payment value and is projected to gain share going forward. Payment policy is playing an increasing role in driving the rate at which consumer payments are transitioning to paper alternatives. This report analyses key policy developments in the region and evaluates their effectiveness in achieving their stated goals. The final section analyses the policy implications and how they relate to the forecast for the region.

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Allowing for open competition

The development of electronic payment platforms is rapidly accelerating globally. By allowing non-traditional payment companies to develop money transfer platforms, more options have become available to consumers throughout the region.

Consumer protection supports sustainable card utilisation

The need to inform consumers of the risks of excessive credit borrowing are essential to reduce skepticism certain consumer segments may have towards paper payment alternatives. Providing additional security for these consumers can increase the likelihood of making the transition.

Initial cost control required for merchant acceptance

The initial cost of card or electronic payment infrastructure can be enough to discourage merchant acceptance. Providing a degree of financial support, education or limits on the acceptance costs can drive initial acceptance.

Aggressive policy results in unintended consequences that can undermine objectives

Taking currency out of circulation or mandating acceptance might accomplish the short-term objectives of a government, but could have long-term impacts that lead to a reversal of policy or create widespread consumer discontent that ultimately undermines the policy. Developing a balanced approach that includes significant time for implementation has proven more effective.

Communicating the security benefits

Security of card and electronic payments is a fundamental way of getting consumers on board for transition. Investing in communicating the security of the payment channel greatly increases the potential for success.

Effectively using incentives

Increasing the cost of paper payments can accelerate the transition, but can anger consumers. Providing incentives for alternatives is more effective, and allows consumers to readily identify a monetary benefit to switching.

introduction

Scope

Introduction

Asia Pacific coverage
Growth drivers over the forecast period
Uncertainty in payment policy

Payment Policy

Traditional development framework
Evaluating policy effectiveness
South Korea (1): Positive debit payment policy
South Korea (2): Embracing digital competition
Indonesia (1): Establishing a payment policy framework
Indonesia (2): Secondary negative policy impacts
India (1): Bold policy to bank consumers and decrease cash usage
India (2): Using cards for payments, not for cash
China (1): Building a global card network
China (2): Controlling access to the system

Regional Forecast

Asia Pacific vs global consumer payment growth
China and the adoption of debit drive card payments
Asia Pacific credit card value growth
Shifting retail landscape drives credit card payments
Asia Pacific debit card value growth
The unbanked potential in Asia

Conclusion

Reconciling all payment players
Best practices for Asia Pacific card and electronic payment policy

Report Definitions

Data parameters and report definitions

Appendix

General scorecard for implemented and planned policy
Defining the cost of policy
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