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Much of the Asia-Pacific region has historically been dominated by cash, which accounted for the majority of payment transactions until quite recently. However, the payments ecosystem has undergone somewhat of an evolutionary shift in recent times. Card payments have been increasing and their higher revenues make Asia-Pacific an attractive proposition for the payments industry.
The year 2020 was one of rapid change in payments as the pandemic fast-forwarded trends which had been slowly developing over recent years. The results have been a surge in digital payments, with cash losing out. This is bringing about opportunities for the payments industry, which is suddenly presented with a much larger potential market.
Argus Advisory Research's comprehensive report on merchant acquiring in Asia-Pacific examines 15 of the most prominent markets: Australia, China, Hong Kong, Indonesia, Japan, New Zealand, Philippines, South Korea and Taiwan around the Pacific Rim, along with Southeast Asia's Malaysia, Singapore, Thailand and Vietnam and finally Bangladesh and India further to the west.
Our country-level analysis profiles the leading players and details the important competitive and regulatory issues across the region. Our deep industry data includes key metrics to help you understand the opportunities and challenges in each market, including cards market sizing, Merchant Services Charges, leading acquirer market shares, and more.
The Merchant Acquiring Asia-Pacific report is essential reading for cards and payments professionals seeking to understand and profit from developments in the region's merchant services market. Contact us for an online demo or to find out more.
This report examines 15 of the most prominent markets: Australia, China, Hong Kong, Indonesia, Japan, New Zealand, Philippines, South Korea and Taiwan around the Pacific Rim, along with Southeast Asia's Malaysia, Singapore, Thailand and Vietnam and finally Bangladesh and India further to the west. The overall picture is that acquiring in APAC is distinctly localised and largely dominated by issuing banks, as well as some unusual acquiring models, making it difficult for global players to enter. However, that is not to say that there are no threads of commonality. There are some emerging trends that cut across markets in the region, despite variability on almost every other front.
With an estimated combined share of 67% in credit cards acquired billed volume and 74% in credit card transactions in 2019, the merchant acquiring market in Australia is dominated by NAB, Commonwealth Bank, Westpac and ANZ Bank. However, this hegemony has slowly reduced over the years.
The City Bank is the leading credit card issuer, as well as being the leading acquirer of credit cards at the POS. It is also the largest acquirer of debit cards at the POS. The City Bank now operates the largest number of POS terminals in Bangladesh.
China's acquiring industry has had to adapt rapidly to serve merchants in an evolving payments market. The explosion of QR code payments through Alipay and WeChat Pay meant that several acceptance networks were being developed in parallel. Regulatory and commercial moves in recent years mean that interoperability between the various payment methods is the focus of the acquiring industry.
As a popular tourist destination, Hong Kong has established a wide card acceptance infrastructure and attracts a high level of credit card spend from cardholders around the world...The widespread acceptance of all major credit card schemes – Visa, Mastercard, JCB International, American Express, Diners Club and UnionPay – ensures high volumes being spent at the POS.
The number of POS terminals operating in the country increased from 1.2 million at the end of 2015 to an estimated six million at the end of 2021. Despite strong growth, this represents just under six terminals per 1,000 adults. However, traditional POS terminals are quickly becoming obsolete in such a fast-paced market.
With an estimated four POS terminals per 1,000 people at the end of 2019, Indonesia remains in want of an adequate card acceptance infrastructure. BCA and Bank Mandiri are the two major acquirers, with an estimated market share of 51% and 24% respectively in terms of total credit card POS transactions acquired.
The merchant-acquiring market in Japan is highly competitive, with all the major issuers involved. With retailers operating multiple terminals to facilitate on-us transactions, the majority of domestic transactions are on-us: hence interchange rarely applies in these circumstances. The economics of credit cards acquiring in Japan is different to many other countries.
Malaysia's merchant acquiring market is highly competitive, with most issuers offering acquiring services. The three largest merchant acquirers – Maybank, AmBank and CIMB – collectively accounted for an estimated 72% market share in 2018 in terms of acquired transactions.
All four of New Zealand's major banks – ANZ, Westpac, BNZ and ASB – provide merchant acquiring services for both Visa and Mastercard credit card transactions. EFTPOS NZ (owned by VeriFone) and Paymark (owned by Ingenico) provide switching services for payment card transactions in New Zealand.
Cash remains the predominant payment method in the Philippines. Cards have not managed to displace the dominance of cash, due to the informal activities of micro-merchants and an unbanked population that stands at around 60%.
Historically, most credit card issuers in this market undertook their own merchant acquiring, leading to a relatively fragmented landscape. In recent years competition has intensified as new digital payment methods have come on the scene...The three major acquirers in the credit cards market are DBS, UOB and OCBC, which together represent a market share of some 66% of transactions on credit cards.
For the most part, there is no interchange in South Korea, and the credit cards market operates predominantly as a three-party system. Although most credit cards are Visaor Mastercard-branded, domestic transactions are not routed through either; the two networks are only used for payments outside the country.
The National Credit Card Centre (NCCC) is the largest acquirer in Taiwan. Despite the freedom to act as one's own acquirer, the merchant acquiring business here remains highly consolidated, with five institutions accounting for almost 100% market share of acquired credit card purchase volume in 2020.
Merchant acquiring in Thailand is relatively consolidated as several banks have less appetite for the acquiring business due to the low margins. KBank and Bangkok Bank dominate the acquiring market, collectively accounting for more than half of the total market share.
There is a variety of acquirers in Vietnam, but the market is highly concentrated. The quartet of leading players – Vietcombank, BIDV, VietinBank, and ACB – collectively account for around 87% of all merchant accounts in the country.
Reports deliver comparative market and competitor intelligence on merchant acquiring and processing, retail banking, consumer credit, payments cards and e-commerce markets. Country Reports provide invaluable market and competitor intelligence on card payments markets in countries worldwide. See the full list of Asia-Pacific Country Reports.
Argus Advisory Research's Merchant Acquiring series will help you to:
Review strategies in a rapidly evolving market and identify the risks and opportunities.
Examine key issues such as consolidations, acquisitions and alliances.
Benchmark your activities against your peers – nationally, regionally and internationally.
Prepare for the future in the knowledge that you have the latest data at your fingertips.
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