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.
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.
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 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.
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.
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