Cash payments in New Zealand are set to witness decline over the next four years due to the growing concerns arising from the coronavirus (Covid-19) pandemic, says GlobalData, a leading data and analytics company.
GlobalData’s revised-forecasts for card transactions in New Zealand predict that the number of ATM cash withdrawals will decline by a compound annual growth rate (CAGR) of -4.8% between 2019 and 2023 while card payments at POS will rise at a CAGR of 2.2% during the same period.
Ravi Sharma, Lead Banking and Payments Analyst at GlobalData, comments: “While card transactions continue to grow at the cost of cash, the growth is likely to be slower because of the overall decrease in consumer spending. Payments companies will lose out on significant business from sectors such as travel and tourism, accommodation and retail which have been hit the hardest due by the lockdown to control the Covid-19 outbreak.”
As consumers are switching from in-store to online purchases in order to avoid exposing themselves to disease vectors such as cash and POS terminals. Consumers are also opting for online purchases because local stores are running out of stock due to delayed shipments, to stockpile items, and to avoid busy public places. Popular online checkout solutions to the likes of PayPal, Visa Checkout, POLi, and Masterpass could potentially benefit from the prevailing trend.
Sharma concludes: “With New Zealand imposing lockdown for one month on 25 March 2020, there will be a decline in the overall consumer spending, impacting the overall payment volume. Payments sector is expected to revive gradually by the end of Q2 2020 once lockdown is completely lifted and the market scenario normalises.”
