New Zealand is among the handful of countries that have been able to successfully contain the spread of COVID-19 with strict lockdown measures. With government easing lockdown restrictions and opening businesses, a rise in spending is expected which will drive card payments growth over the next five years, says GlobalData, a leading data and analytics company.
According to GlobalData revised forecasts, the value of card payments is forecasted to grow marginally by 0.2 percent in 2020. It is forecasted to reach NZ$ 97.9 billion (US$ 66.0 billion) by 2024, increasing at a compound annual growth rate (CAGR) of 2.2 percent between 2020 and 2024. On the other hand, ATM cash withdrawals is forecasted to decline at a CAGR of 3.6 percent to reach NZ$ 11.7 billion (US$ 7.9 billion) by 2024.
Ravi Sharma, Lead Banking and Payments Analyst at GlobalData, comments: “The current pandemic has triggered a fear of infection through the handling of cash, pushing consumers to move away from cash payments. This will accelerate the shift towards electronic modes of payments, partially contactless cards.”
To push the usage of contactless cards for in-store purchases, the Payments NZ (the governing body of New Zealand’s payments system) temporarily increased the limit on contactless payment from NZ$ 80 (US$ 53.96) to NZ$ 200 (US$ 134.89), effective from April 09, 2020. This is in line with similar measures undertaken by countries such as the UK and Australia.
The present crisis is also driving e-commerce growth, as individuals are looking to avoid the exposure to the deadly virus, but preferring the comfort, safety and convenience of online shopping. This will also benefit cards payments as they account for two-third of the country’s e-commerce payments.
Sharma concludes: “New Zealand has a mature payment card market with well-developed payment infrastructure. COVID-19 outbreak will act as a catalyst to accelerate the shift towards cash-less payments in the country and support growth in card payments.”