COVID-19 has had a profound effect on the Thailand tourism industry with reduced tourism spending. However, the gradual reopening of travel will provide the much-needed push to the country’s economy, which in turn will positively impact the country’s payment industry, says GlobalData, a leading data and analytics company.
According to GlobalData’s Payment Cards Analytics, card payments in Thailand is estimated to grow by 2.3% in 2020. The value is expected to reach THB2.5 trillion (US$82.8bn) by 2024, at a compound annual growth rate (CAGR) of 6.2% between 2020 and 2024.
The COVID-19 outbreak affected Thai economy, particularly its tourism sector, resulting in revenue loss of over US$1bn in Q1 2020. To revive the tourism sector, the government provided stimulus packages to the tune of THB100bn (US$3.4bn) along with other benefits like subsidies for hotel stays and flights tickets for travelers.
Nikhil Reddy, Banking and Payments Analyst at GlobalData, explains: “A gradual rise in tourist inflow and spending is expected with the country now easing travel restrictions. This will in turn support card payments growth in the country.”
Cash, which has been traditionally a preferred mode of consumer payments, is now taking a back-seat amid the COVID-19 pandemic. The growing adoption of card payments is also supported by rising awareness of electronic payments, an expanding payment infrastructure, and an increase in the country’s banked population.
Mr Reddy concludes: “The tourism-reliant Thailand is among the handful of countries that effectively controlled the COVID-19 pandemic with little over 3,600 cases. This coupled with government’s support for tourism sector, easing of travel restrictions and resurgence of consumer spending will drive the Thai card payments market in the coming years.”