Chart of the Week: Indonesia’s card payments market to grow 10.7% in 2022

Growth will be driven by the rise of debit card use.

Indonesia’s card payments market is headed towards recovery thanks to the gradual rise in consumer spending and the growth of debit card payments.

The country’s card payments market is anticipated to expand by 10.7% and be worth $44.2b (IDR619.5t) in 2022, according to data and analytics firm GlobalData.

This follows its estimated 8.4% growth in 2021 to become a $40b (IDR559.9t) market.

Recovery in card payments is thanks to debit cards, whose payments value is expected to grow by 14.3% in the next 12 months, supported by the migration of cash transactions to debit cards.

To offer a secured payment experience and boost consumer confidence, the government has migrated all debit cards to the EMV standard, with the deadline set last 31 December 2021.

Credit and charge card payments’ growth is forecasted to grow marginally, with only a 5.4% growth over the same period. This is because of an expected reduced consumer spending on airline tickets, hotels, restaurants, and transportation because of lockdown and travel restrictions.

Indonesia recently capped the monthly interest rate at 1.75% effective from 1 July 2021, reducing from the previous rate of 2%, to encourage the use of credit cards.