Mainstreaming Mobile Transactions in Taiwan
While the Chinese mainland and Southeast Asia have embraced mobile payment, Taiwanese consumers remain unconvinced.
22 June 2017
A recent survey by the Institute for Information Industry (III), a non-governmental organisation reporting to Taiwan's Ministry of Economic Affairs, found that mobile payments are still far from common across the island 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 other economies in the region.
The survey, carried out on behalf of III by one of its subsidiary bodies – the Market Intelligence and Consulting Institute (MIC), 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 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 mobile devices 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 area for mobile purchases was clothing, footwear, bags and accessories, where one in five of those surveyed (19.3%) had made mobile payments. Mr Hu said the big discrepancies between sectors were largely down to the fact that restaurants were initial testing grounds for Taiwan's mobile payment systems.
Mr 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 well-established international players, such as Apple Pay, Android Pay and Alipay, as likely to eclipse the limited functionality of domestic mobile transaction companies.
The MIC research also discovered that physical retail stores and credit card-issuing banks remain the two most important channels for promoting mobile payment services to consumers. The 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 per cent 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.
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- Hong Kong