The past month in particular, with the coronavirus, has turned into a new way of life for all of us. From what I have seen, we adapted quickly as well. I think you are as curious as I am about how these changes will affect payment systems in the coming period. I was eagerly waiting for the data that BKM would share on this subject.
BKM (Interbank Card Center) has announced the transaction data for March 2020 in Turkey.
When these figures are compared with the data for March 2019:
- The number of card payments increased by 3%.
- The number of cash withdrawals decreased by 14%.
- The number of contactless payments roughly tripled, reaching 85.8 million.
- 2.5 million contactless-enabled cards were used for the first time.
- 3 million cards were used for the first time in online shopping.
- The total number of cards grew 9% year on year to 239 million.
- The card payment amount rose 9% to a total of TL 85.5 billion.
- The cash withdrawal amount increased 8% to TL 81.6 billion.
- Grocery grew by 44%, and electronics and health-cosmetics by 16%. Grocery, electronics, and health-cosmetics were the three sectors where the card payment amount increased the most.
- With the effect of the measures taken because of the coronavirus, airlines and accommodation fell by 42%, and travel agencies by 33%.
According to the data above, the 3 most striking details appear to be
- The rise in contactless transactions,
- The rise in the number of cards used for the first time in online transactions, and
- The sharp drop in airline and travel agency transactions.
Why did contactless payments increase so much?
It is undeniable that contactless transactions are becoming more widespread, but we can say that the coronavirus outbreak, which has caused serious changes in nearly every part of our lives, is a very important factor in this increase. Contactless transactions are preferred because they are fast, easy, hygienic and keep contact to a minimum.
Another reason for the increase in contactless transactions is that the contactless transaction limit was raised from TL 120 to TL 250. This led to contactless payment technology being used for more payments.
In March, 1 in every 5 in-store payments was contactless, and 2.5 million different cards were used for contactless payments for the first time. In the second week of March, when social isolation began, contactless payments rose sharply in particular, and the sectors with the most contactless payments were grocery, restaurants and health/cosmetics.
Considering the data above, can a forecast be made for contactless transaction counts and amounts in April?
Given that the whole of April will be spent in social isolation and given the tendency toward contactless transactions, we can say that March's contactless payment figures will multiply even further.
What is the situation with card payments made online?
Grocery was among the leading sectors with the biggest increase in online card payment amounts. Online payments in the grocery sector rose roughly 2.5 times compared with the same period last year, reaching TL 1.7 billion.
In March, 1 out of every TL 5 of card payments was made online, and 3 million cards were used for online payments for the first time. The online card payment amount rose 19% compared with the same period last year, reaching TL 16.5 billion.
The fact that 3 million cards were used for online payments for the first time is also a very important data point. What can we say about this?
Although the growing volume of online shopping is a factor, online payments increased significantly because online grocery services and their service quality improved, delivering to the doorstep, and because, with the coronavirus, they offered an alternative for meeting our needs without leaving home.
Which sectors will emerge stronger from the coronavirus outbreak?
First of all, companies that touch customers digitally and offer solutions by understanding their needs better will go from strength to strength. At this point, I think payment institutions and e-money institutions will also become much stronger.
Finally, did we really #StayHome in March?
To protect ourselves from the coronavirus outbreak or to prevent it from spreading, we need to pay attention to social distancing. The rise in online shopping and the sharp increase in contactless payments show that social distancing and personal quarantine are being observed.
What can we say? To get to the good days sooner, let's keep our social distance and take care of our hygiene. Let's make our payments online or contactless whenever possible :)
You can find BKM's report at the link below.
