Card Payments in Emerging Markets


Card payments have been growing in popularity in emerging markets even over the period 2008 to 2009.  During this time, developed markets experienced negative growth (in US$) as consumers shifted payment preference to non-revolving credit instruments.  Consumers’ desire to spend within the confines of their wallets and avoid debt, benefited debit cards.

Emerging market card payment growth is due, in part, to:

  • Transitioning unbanked individuals to mainstream financial services
  • Travel and tourism
  • The youth population
  • Growth of modern retail formats
  • Urbanization, which may expose a segment of the population to financial cards for the first time

Indonesia’s economic climate should provide a solid foundation for future card payment growth:

  • The economy grew during the global economic downturn
  • The typical Indonesian consumer carries much less debt than the average global consumer
  • Indonesian consumers are spenders with a low savings ratio

Financial cards should benefit from the high spending Indonesian consumer as transactions switch from cash to card. Drivers for card payments in Indonesia in the future are as follows:

  • Internet retailing, which is still in its infancy in Indonesia
  • Travel, which is becoming more affordable in the country
  • The population under 30 years old, which makes up almost half the total population in the country

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