GlobalData’s revised-forecasts for New Zealand predict that card payments will increase at a compound annual growth rate (CAGR) of 1.8 percent from NZ$89.5bn (US$60.3bn) in 2019 to NZ$97.9bn (US$66.0bn) by 2024.
Nikhil Reddy, Banking and Payments Analyst at GlobalData, comments: “The pandemic will have profound effect on consumer spending, affecting the payments industry. It has triggered a fear of infection through handling of cash, thus pushing adoption of non-cash payment tools, particularly contactless cards.”
With an aim to reduce the need for consumers to touch PIN pads while making in-store purchases, the limit for contactless payment in New Zealand has been temporarily increased from NZ$80 (US$53.96) to NZ$200 (US$134.89), effective from 9 April 2020. This is in line with similar measures undertaken by countries such as the UK and Australia.
The present crisis is driving e-commerce growth, as individuals in order to avoid exposure to the deadly virus, prefer the comfort, safety and convenience of online shopping– again benefitting the payment cards market. According to GlobalData’s 2019 Banking and Payments Survey, credit and debit cards together accounted for over half of the country’s total e-commerce payments value in 2019.
Reddy concludes: “New Zealand has a well-developed card payments market. Although the pandemic is set to hamper payments industry growth in the short run, the rise in consumer spending once the restrictions are lifted coupled with the growing consumer preference for electronic payments will fuel growth in the country’s’ payments card market over the next five years.”