Current Status of the Third-Party Payment in Taiwan and its Future Development

With the development of electronic commerce and the change in consumption patterns, both micro businesses and large enterprises actively consider developing their business through online platform. This global trend also generates a high-developing electronic commerce in Taiwan. Considering the limitation of the operating and technical risk for micro business to take advantage of credit card service, Third-Party Payment Industry provides a new path to resolve the issue of payment in electronic commerce. First, this research explores the the current situation of Third-Party Payment industry in Taiwan and Mainland China to explore the possibility of developing Third-Party Payment in Taiwan,which can find Taiwan''s viable opportunities for Third-Party Payment in the future. Second, as a reference to the operator in the market, this research further estimates the potential transaction size of Third-Party Payment Industry in Taiwan. The results revealed that the current market focuses on the cross-border transaction between Taiwan and Mainland China due to the large market size and consumer preference in Mainland China. However, the research strongly suggests that developing the domestic market of Third-Party Payment is an alternative for Taiwanese business; high proportion of non-credit card transaction, the gradual growth of electronic commerce and the popularity of mobile devices are the major reasons for the optimistic expectation in this market. In addition, Southeast Asian market of cross-border payment will be another breakthrough in developing Third-Party Payment due to its high demographic dividend, the popularity of mobile devices and the grown infrastructure including internet in Southeast Asia. This study also demonstrated the estimation of the transaction size of the Third-Party Payment industry in Taiwan by making use of Alipay in Mainland China as a benchmark. It estimated that the proportion of Third-Party Payment to the whole electronic commerce would achieve its peak from 2022 to 2025; the transaction size would exceed one trillion in TWD from 2021 to 2023. The rapid development can be attributed to the globalization of Electronic Commerce, the popularity of mobile devices, the trend of mobile payment and the maturing security of online payment.