Visa Reports 15 Percent Spending Growth On Cards In Asia

Based on data collected from eight key Asia Pacific markets, India has emerged as the fastest growing country for domestic spending on Visa cards in the region, with a growth rate of 49 percent. The second fastest was the Philippines with a 43 percent growth rate, while Thailand and Hong Kong tied for third place with 20 percent increases. Other markets included in the report were Malaysia (15 percent), New Zealand (8 percent), Australia (5 percent) and Singapore (4 percent).

Overall, the highest Visa domestic spend levels were recorded in Australia ($15 billion), Hong Kong ($2.6 billion), New Zealand ($1.8 billion), Thailand ($1.4 billion) and Malaysia ($1 billion). Cardholders from the eight markets made approximately 322 million Visa transactions within their own markets during the final quarter of 2005.

In Asia Pacific, Visa has a greater market share than all other payment card brands combined, with 62 percent of all card purchases at the point of sale being made using Visa cards.

Impact on India

Visa has brought the convenience and security of payment card usage into the daily lives of consumers. These initiatives include Visa Money Transfer, a card-to-card transfer service which allows consumers to remit funds from their bank account or Visa Debit card to any of the 21 million Visa Debit cards or nine million Visa Credit cards in 150 locations across India; Visa Bill Pay, which enables Visa cardholders in India to make bill payments conveniently using their Visa credit cards; and Visa Mobile Top Up, allowing Visa cardholders to top up mobile prepaid cards through ATMs of partner banks.

“The growth in domestic spending in India illustrates well the impact of the intense efforts Visa is making in this important market,” said Paul Dowling, Visa Asia Pacific’s Executive Vice President for Corporate Relations. “To increase the acceptance of payment cards, Visa has launched several programs to help provide affordable point-of-sale options for merchants. Harnessing the power of mobile technology, for example, to accept secure, credit and debit payment using mobile phone SIM cards, lowers the entry barriers for small and medium sized merchants, thereby expanding card acceptance in non state-capital cities. This strengthens the business for member banks and also opens up the card acceptance infrastructure to a larger cross section of merchants with low threshold volumes.

“Working with our member banks on programs such as these, Visa has seen a substantial jump in the number of credit and debit cardholders across India - a 28 percent growth to 36 million cards over the same period - also contributing to the growth in India’s domestic spending,” concluded Dowling.

Regional Spending Trends Identified

The report highlights some interesting spending trends and habits in the markets of Australia, Hong Kong, India, Malaysia, New Zealand, the Philippines, Singapore and Thailand, which can provide useful insights for retailers, service providers and Governments as they focus on marketing and business development through the Visa payment system.

Shopping tops the list

Accounting for 24 percent of total spending on Visa cards, retail goods was the most popular category in all markets apart from the Philippines. This was followed by transportation (15 percent), professional and commercial services (14 percent), restaurants and food outlets (12 percent) and home construction and furnishing (10 percent).

Hong Kong’s thirst for shopping was reflected in the fact that 41 percent of Hong Kong cardholder spending was at retail outlets; more than any other country in the region. India came in second at 37 percent and Thailand at 32 percent, demonstrating the excellent opportunity and potential for Visa’s retail merchants in each of these markets.

India’s focus on fashion

The total spending in retail outlets was further segmented into three main categories - clothing merchants ($1.4 billion), department and discount stores ($1.3 billion) and specialty retail merchants ($593 million). The report revealed that Visa cardholders in India spent most at clothing outlets, accounting for 15 percent of their total Visa spending, while clothes shops were at the bottom of Thailand’s list, at just 3 percent of their total spending. However, Thais made up for this by spending more in department and discount stores than any other market, accounting for 19 percent of their total retail spending, reflecting the dominance of such retail outlets in this market.

A love for food

Cardholders in the Philippines demonstrate a national love of food, with one third (35 percent) of Visa transactions taking place at restaurants, groceries and supermarkets – more than any other market in the report.

Services focus in Australia

Reflecting the mature nature of its financial infrastructure, Australian cardholders used their Visa cards more than any other market surveyed for government, legal and social services, accounting for 91 percent of the total spending in this category. Cardholders in India, Malaysia and the Philippines hardly used their payment cards on government, legal or social services, or on education. However, these markets are well-positioned to follow Australia’s lead and take advantage of the cost savings and efficiencies of electronic payment systems in areas such as government procurement, tax collection, disbursal of benefits and, in fact, almost all one-off or recurring payment needs.