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Taiwan's Mobile Payments Sector Still Lacks Mainstream Uptake

While their SE Asian neighbours have embraced mobile payments, Taiwanese consumers remain unconvinced.

Photo: Mobile payments: Still something of a rarity in Taiwan apparently. (Shutterstock.com)
Mobile payments: Still something of a rarity in Taiwan apparently.
Photo: Mobile payments: Still something of a rarity in Taiwan apparently. (Shutterstock.com)
Mobile payments: Still something of a rarity in Taiwan apparently.

A recent survey by the Institute for Information Industry (III), an NGO reporting to Taiwan's Ministry of Economic Affairs, found that mobile payments are still far from common across the territory and are solely used for low-value transactions. Since such transactions are also usually linked to special offers, it is safe to assume that Taiwan's mobile payment industry is still very much in its infancy compared to a number of other Southeast Asian countries.

The survey, carried out on behalf of III by the Market Intelligence and Consulting Institute, one of its subsidiary bodies, found two thirds (66.7%) of consumers make mobile payments only around four times a year. Of these consumers, almost nine out of 10 (86.9%) make payments of less than NT$1,000 (US$33) on each occasion.

Hu Tzu-li, a senior industry analyst, believes the current usage pattern is a legacy of the way many of the current mobile payment services were launched last year. At the time, operators sought to woo consumers by offering cut-price deals, and many of those consumers still primarily associate payment service with low-value transactions. Mobile payment services have been unable to shed this image, and few consumers have become regular patrons.

The MIC survey also indicated that the use of mobile payment systems varies hugely from sector to sector. The report found three out of four consumers surveyed (76.4%) had used mobiles to pay bills in the restaurant and hospitality sector, the largest area for mobile payments, while one in three (33.2%) used mobile systems for paying transportation charges, parking fees and for fuel. The third largest arena for mobile purchases was clothing, footwear, bags and accessories, where one in five of those surveyed (19.3%) had made mobile payments. Hu said the big discrepancies between sectors were largely down to the fact that restaurants were the initial testing grounds for Taiwan's mobile payment systems.

Hu believes that many of the existing local players in the mobile payment sector may be squeezed out when the larger global service providers turn their attention to Taiwan. He sees the wider range of services offered by such well-establish international players as Apple Pay, Android Pay and Alipay as likely to eclipse the limited functionality of domestic mobile transaction companies.

The MIC also discovered that physical retail stores and credit card-issuing banks remain the two most important channels for promoting mobile payment services to consumers. Its survey found that just over half (53.7%) of consumers first become aware of mobile payment channels through bricks-and-mortar stores, with 50.6% basing their knowledge on information provided by card-issuing banks. Mobile payment service providers themselves, as well as social media channels, are also seen as having key roles to play in building awareness.

Francess Lin, Taiwan Office

Content provided by Picture: HKTDC Research
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