Alternative payments for ecommerce rise in Taiwan

While cards remain the most preferred payment tool for e-commerce purchases in Taiwan, alternative payment solutions are increasingly being used for online purchases, accounting for a share of 28.8% share in total e-commerce transaction value in 2022, finds GlobalData’s 2022 Financial Services Consumer Survey*.

GlobalData’s E-Commerce Analytics reveal that the Taiwanese e-commerce market grew by 13.9% in 2022 to reach TWD1.3 trillion ($42.6 billion), as an increasing number of consumers shift from offline to online purchases. The e-commerce market in Taiwan is expected to further grow by 12% to reach TWD1.5 trillion ($47.8 billion) in 2023.

Kartik Challa, Senior Banking and Payments Analyst at GlobalData, comments: “The e-commerce market in Taiwan has been growing at a robust pace, mainly due to rising internet and smartphone penetration, coupled with increasing consumer confidence in online transactions. The pandemic accelerated this shift in consumer preference from brick-and-mortar to online channels. Furthermore, online shopping festivals such as Singles’ Day and Annual 12.12 Birthday Sale have also contributed to the overall growth of e-commerce in the country.”

According to GlobalData’s 2022 Financial Services Consumer Survey, over 90% of Taiwanese consumers reported having shopped online in the past six months, while only less than 4% of respondents indicating that they never shopped online.

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GlobalData’s survey also revealed that among various tools used for e-commerce purchases, payment cards are the most preferred, accounting for 47.1% share in 2022. This can be attributed to reward programs including interest-free instalment options, cashback, discounts, and other benefits.

Alternative payment solutions are also popular in Taiwan, with Line Pay, 7-11 Ibon, Apple Pay being the major brands.

Kartik adds: “The emergence of new payment models such as buy now pay later (BNPL), which allows consumers to split total purchase amount into instalments are some of the factors supporting overall alternative payment solutions growth. In addition to traditional banks, fintech companies such as Atome and AFTEE offer this service in Taiwan.”

While the cash share of e-commerce payments is declining in Taiwan, it still accounts for nearly 9% of e-commerce purchases in 2022.

Kartik concludes: “Taiwan will continue to witness high growth in e-commerce sales, which is forecast to grow at a compound annual growth rate (CAGR) of 9.9% between 2022 and 2026 to reach TWD1.9 trillion ($62.2 billion) in 2026. Alternative payment solutions are expected to continue their growth but still have to go some way to displace payment cards as the most preferred payment solution”.

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* GlobalData’s 2022 Financial Services Consumer Survey was carried out in Q2 2022. Approximately 50,000 respondents aged 18+ were surveyed across 40 countries

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