While Taiwan has the necessary infrastructure and each consumer has an average of six cards, payment cards are not used frequently compared to most other markets with a mature infrastructure in place.

According to our Payment Cards Analytics dashboard, in Taiwan each debit card is used an average of only once a year, while credit and charge cards are used for around 25 transactions each year. These figures are comparable to China and Hong Kong but are much lower than in Australia and New Zealand, where on average each payment card is used more than 100 times a year.

2015 payment card usage frequency and average transaction value in Taiwan

In many ways, consumer payment transactions in most Asian markets are still very much cash-based. The densely populated urban nature of markets like Taiwan, where many merchants are within walking distance and ATMs are available at every corner, provides little incentive for consumers to shift from cash to cards. This is compounded by the fact that many small merchants in Taiwan do not accept payments cards. These merchants typically compete with other businesses in their vicinity on very low margins, and are therefore extremely sensitive to any increases in their costs.

But Taiwanese consumers have shown a willingness to use their credit or charge cards at POS terminals if there are incentives to do so. Providers should consider discounts, reward programs, and cashback offers if they want to entice consumers to swap cash for plastic.