• Directory of Taiwan

Local payment culture seen changing

Local payment culture seen changing

Rapid innovations from contactless card payments to the introduction of various hybrids of store value cards are transforming Taiwan's payment culture, a top MasterCard executive said yesterday.

However, the speedy deployment of those technologies is also making it tougher for small and medium-size players to catch up with the big boys, noted Tina Chiang, vice president and business manager of MasterCard for Greater China.

"For your payment product to click, you have to offer real, tangible benefits and value to consumers," the industry veteran told a media gathering.

"Card issuers will also be playing the 'segmentation' game."

Instead of rolling out one-card-fits-all products, issuers will be creating plastics tailor-made to meet a specific group's requirements and desires, Chiang continued.

As of October 2005, Taiwan's credit card sales volume reached nearly NT$1.36 trillion, up 15.33 percent compared with year-ago figures, industry data showed.

Taiwan's fiercely competitive credit card market also got even more intense in 2005. The average Taiwanese cardholder carries at least five cards, and there was a marked scarcity of new co-branded card opportunities, according to MasterCard.

Cards that did not offer "overwhelming" features also failed to attract users, it added.

Delinquency rates also surged in 2005, squeezing credit card profitability and causing a credit tight-up. This prompted issuers to focus on risk management and look for other fee income opportunities, said Chiang, citing industry reports.

In terms of top business destinations, China ranked as the No. 1 travel destination for Taiwan's road warriors, according to the 2005 MasterIndex of Travel for Taiwan. The U.S., Japan, Hong Kong, Thailand, and Europe also attracted their fair share of corporate travelers, it noted.

Japan however was the destination of choice for Taiwanese leisure travelers, followed by Europe, the U.S., China, and Thailand. In terms of credit card marketing strategies in 2006, MasterCard said issuers would likely be zeroing in on the high net worth and affluent market. Over the 2003 to 2008 period, Taiwan will be overtaking Hong Kong as the second fastest-growing market in this area, according to Datamonitor's Global Wealth Model.

The number of high net worth individuals in Taiwan will grow by 68.6 percent from 2003 to 2008, while China's will increase by 72.8 percent, Japan's by 26.5 percent, and 3.3 percent for Hong Kong.

MasterCard is also expecting its Combo card or multiple service card to make huge gains in the coming year. According to Chiang, this product will enable issuers to leverage and link with banking products, maximize existing banking resources, provide the "right" value to the "right" customers, and differentiate their plastics from their rivals.

MasterCard is also upbeat about the prospects of its "tap-and-go" technology in Taiwan, PayPass. A new "contactless" payment program that provides consumers with a simple way to pay, this technology could put an end to the long queues at fastfood chains, movie houses and other outlets where speed is essential, MasterCard said. The payment program is "contactless" since consumers only need to "tap" their payment card or alternative PayPass form-factor on a specially equipped merchant terminal.

Earlier this year, Cathay United Bank, E.Sun Bank and Bank of Kaohsiung started issuing the TaiwanMoney Card, the world's first MasterCard OneSMART PayPass Chip Combi Card program.

The TaiwanMoney Card integrates both contact and contactless chip payment solutions for electronic transportation payments. The all-in-one payment card combines MasterCard credit, debit, Mondex stored value features, access to the Cirrus Global ATM network, and MasterCard PayPass contactless functionalities.

Updated : 2021-05-11 13:43 GMT+08:00