Financial Cards and Payments in Asia Pacific

February 2021

Coronavirus (COVID-19) had a major impact on financial cards and payments in 2020, with a marked slowdown in consumer payment transactions. The pandemic helped to speed up the ongoing move away from cash, with consumers and retailers avoiding handling cash for health reasons. This helped encourage consumers to move in the direction of contactless and electronic payments. Consumer payment transactions are expected to immediately return to seeing stronger growth rates from 2021.

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Key findings

COVID-19 hits consumer payment transactions

Consumer payment transactions experienced a marked slowdown in Asia Pacific in 2020 as a result of the COVID-19 pandemic, although positive growth was still recorded. Consumers and retailers tried to avoid handling cash for hygiene reasons, encouraging greater use of card payments, particularly in the contactless mode. M-commerce also continued to thrive in this environment.

Cash continues losing share in 2020

While cash remains an important payment method, and is still the leading means of payment in a number of countries in the region, it continues to lose share. This is being supported by growing merchant acceptance of card and contactless payments as well government policies driving the trend towards cashless societies. Consumers continue to be attracted to the convenience of cashless payment methods, particularly via their smartphones. M-commerce also enables financial inclusion of the unbanked population in the region.

China opens up local payments market

China is opening up its local payments market to foreign companies. In June 2020, American Express received approval to start bank card clearing services from The People’s Bank of China, making it the first foreign credit card company to launch onshore operations in China. The American Express licence has been granted for use by its Express (Hangzhou) Technology Services joint venture with LianLian DigiTech. American Express is expected to be the first of a number of foreign players to enter the large Chinese financial services market.

Strong m-commerce growth expected

In spite of the economic impact of COVID-19, a return to strong annual growth rates is expected for consumer payments from 2021, with m-commerce continuing to record particularly dynamic growth over the forecast period.

Introduction

Scope
Key findings

Regional Overview

Strong 2015-2020 period growth in consumer payment transactions
Above-average performances for card payment transactions
2020 slowdown to be followed by stronger growth from 2021
Card transactions outperform overall consumer spending in 2020
China drives the overall 2015-2020 growth in Asia Pacific
Cards and electronic direct/ACH transactions taking share from cash
Booming debit and credit card 2015-2020 performances in China
Debit and credit cards account for all the new value
M-commerce proves an ideal payment method during a pandemic

Leading Companies and Brands

UnionPay the dominant force, ahead of Visa and Mastercard
South Korea a key market for a number of leading players

Forecast Projections

Return to stronger growth expected from 2021
Cash to continue losing share over the forecast period
Credit and debit cards to drive forecast period growth
Pandemic serves to boost contactless payments
Further strong growth expected for m-commerce over 2020-2025
Smartphones offer financial inclusion for the unbanked population

Country Snapshots

China: Market Context
China: Competitive and Retail Landscape
China: M-commerce and Consumer Payment Value
Hong Kong, China: Market Context
Hong Kong, China: Competitive and Retail Landscape
Hong Kong, China: M-commerce and Consumer Payment Value
India: Market Context
India: Competitive and Retail Landscape
India: M-commerce and Consumer Payment Value
Indonesia: Market Context
Indonesia: Competitive and Retail Landscape
Indonesia: M-commerce and Consumer Payment Value
Japan: Market Context
Japan: Competitive and Retail Landscape
Japan: M-commerce and Consumer Payment Value
Malaysia: Market Context
Malaysia: Competitive and Retail Landscape
Malaysia: M-commerce and Consumer Payment Value
Philippines: Market Context
Philippines: Competitive and Retail Landscape
Philippines: M-commerce and Consumer Payment Value
Singapore: Market Context
Singapore: Competitive and Retail Landscape
Singapore: M-commerce and Consumer Payment Value
South Korea: Market Context
South Korea: Competitive and Retail Landscape
South Korea: M-commerce and Consumer Payment Value
Taiwan: Market Context
Taiwan: Competitive and Retail Landscape
Taiwan: M-commerce and Consumer Payment Value
Thailand: Market Context
Thailand: Competitive and Retail Landscape
Thailand: M-commerce and Consumer Payment Value
Vietnam: Market Context
Vietnam: Competitive and Retail Landscape
Vietnam: M-commerce and Consumer Payment Value
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