Taiwan’s cards and payment market is growing rapidly, with the total value of card transactions in 2024 reaching $168 billion. Businesses that want to accept payments in Taiwan can capitalize on this expansion by developing a deep understanding of local payment preferences and transaction security regulations.

Below, we’ll explore how businesses can successfully enter the Taiwanese payment system by:

• Supporting mobile payments
  
• Investing in cybersecurity
  
• Gaining customer trust
  

The state of the market

Taiwan uses traditional and modern payment methods. Though cash remains a dominant payment method, especially for in-person transactions, the popularity of electronic payments is increasing. In 2022, 49% of Taipei residents preferred cashless payment methods, highlighting the growing demand for cards, mobile payments, and digital wallets.

Taiwan’s regulatory structure is supportive of digital innovation and adaptable to changing circumstances. The Central Bank of the Republic of China (the Republic of China is Taiwan’s official name) is the primary institution overseeing the country’s monetary policies. The Financial Supervisory Commission (FSC) ensures the stability and integrity of Taiwan’s financial markets, supervising the banking, securities, and insurance sectors for compliance with the agency’s guidelines.

Payment methods

Taiwanese customers use a wide range of payment methods, including cash and QR codes. Here are the most prominent ones:

Usage

Despite the growth in digital finance, Taiwan still relies heavily on cash. In 2023, cash accounted for over 42% of total transaction volume. Credit card payments are increasing, however, with total card payment value up 20.8% from 2022 to 2023.

A 2023 survey found that about 36.6% of people in Taiwan reported using mobile payments, but there’s a wide age gap. About 64.0% of 30- to 39-year-olds used mobile payments, compared with about 5.6% of those older than 70. Global digital wallets such as Apple Pay and Samsung Pay let users link their credit or debit card details to their smartphones, but local solutions attuned to the needs and preferences of Taiwanese customers are dominant in mobile payments. LINE Pay and Jkopay are two platforms often used for mobile and QR code payments, with functionalities extending beyond payments to let users send money to friends, pay utility bills, and book event tickets.

Popular B2C payment methods in Taiwan

• Credit cards
  
• Digital wallets (e.g., LINE Pay)
  
• QR codes (e.g., Jkopay)
  
• Buy now, pay later (BNPL)
  

Popular B2B payment methods in Taiwan

• Credit cards
  
• Credit transfers
  
• Direct debits
  

Trends

BNPL solutions are gaining traction in Taiwan, with payments projected to increase over 14% to hit $1.28 billion in 2025. Providers such as Atome and Shopee Taiwan give customers the option of installment payments, making the process more flexible.

Ease and friction of entry

Along with payment methods, businesses that want to accept payments in Taiwan need to consider taxes, chargebacks, international payments, and payment security regulations. Here’s a rundown:

Taxes

Taiwan’s value-added tax (VAT) rate for most goods and services is 5%. Though customers see this tax reflected in the prices they pay, businesses are responsible for collecting and remitting VAT to the Taiwanese government. Noncompliance or late payments can result in penalties.

Businesses in specific industries, including financial institutions, also pay the gross business receipts tax (GBRT). For banks and insurance businesses, the GBRT rate is 5% of revenues derived from core business operations.

Chargebacks and disputes

For chargebacks, Taiwan tends to side with customers, a stance formalized in the nation’s Consumer Protection Act. Similar to the dispute resolution process in Europe, businesses in Taiwan are required to demonstrate the legitimacy of a transaction if a dispute arises.

International payments

Accepting international payments (B2C and B2B) in Taiwan necessitates additional steps compared with those of domestic payments. Important aspects include:

• Multicurrency features: Businesses that cater to international clients or operate online can incorporate multicurrency features into their payment interfaces through their payment gateways to present prices in the customer’s local currency.

• Currency conversion: When customers pay in a currency other than the New Taiwan dollar, currency conversion is necessary. Conversion rates are determined in real time, with fees from 1% to 3% that can be absorbed or passed on to customers. Third-party platforms such as Stripe simplify this process for businesses by handling currency conversion at the time of payment.

• Payment methods from other markets: Accepting popular payment methods from other countries, such as China’s WeChat Pay and Singapore’s PayNow, can improve sales among international tourists by making the checkout process more approachable.

Security and privacy

As the popularity of ecommerce and digital transactions continues to increase, Taiwan’s regulatory framework emphasizes protecting customer data, combating illicit financial activities, and promoting the safe adoption of new financial technologies. Here’s an overview:

• Data protection laws: Taiwan’s Personal Data Protection Act (PDPA) governs the collection, processing, use, and international transfer of personal data. Data-collecting entities must clearly state the purpose behind the collection and can’t use the data for anything beyond that stated purpose. They are also responsible for verifying the accuracy of the data they collect and securing it against breaches.

• Electronic transaction measures: The Electronic Signatures Act enabled the use of electronic signatures and records in legal transactions, making it easier for businesses and customers to execute digital transactions without compromising on legal validity.

• Card payment security: As in many other markets, Europay, Mastercard, and Visa (EMV) chips have become standard for cards issued in Taiwan. This offers another layer of security compared with that of traditional magnetic stripe cards. EMV chip technology can reduce the risk of fraud from card skimming and similar tactics.

• Anti-Money Laundering legislation: The Money Laundering Control Act and the Counter-Terrorism Financing Act serve as the foundation of Taiwan’s efforts against illegal financial activities. Financial institutions must establish internal control and audit systems and report suspicious transactions to prevent money laundering and terrorism financing.

• Government oversight: As the primary regulatory body, the FSC oversees banks, securities firms, insurers, and other financial institutions to ensure they adhere to regulations and use best practices for risk management.

Key success factors

Taiwan’s payment systems must cater to a diverse demographic and adapt to developing technologies and a shifting regulatory environment. These challenges explain the changing nature of payments in Taiwan and the broader market dynamics. Consider the following to prepare for entry into the Taiwanese payment market:

• Flexible payment options: Though adoption of digital and mobile payments has steadily increased, cash still plays a big role in day-to-day transactions. This poses challenges for businesses that want to move entirely to digital platforms because it necessitates supporting a mix of digital and traditional payment systems. Businesses accepting payments in person can benefit from accepting cash alongside digital payments, and ecommerce businesses can provide customers with multiple payment options including credit cards, BNPL, and more.

• Digital wallet acceptance: Local digital wallets such as LINE Pay and Jkopay are prominent players in the payment market. Accepting these payment methods can improve the customer payment experience and show that your business knows what local customers want.

• Targeted customer support: Localizing your payment strategy for Taiwan goes beyond deciding which payment methods to integrate. Providing options for customer support in the most spoken local language, Taiwanese Mandarin, can make the payment process smoother for customers and reduce cart abandonment.

• Reinforced cybersecurity measures: Given the rise in digital payments, there’s an increased emphasis on cybersecurity. The threat of cyberattacks requires continuous investments in technology and personnel training to safeguard customer data and maintain trust. Ensure compliance with international standards such as the Payment Card Industry Data Security Standards (PCI DSS), and employ fraud prevention tools such as 3D Secure authentication.

Key takeaways

Taiwan’s developing payment systems present challenges and opportunities. Businesses can enhance the customer payment experience by adapting to local preferences while staying up-to-date on technological and regulatory shifts. Here’s a recap and tactics for successfully accepting payments in Taiwan:

Support mobile payments

• Facilitate digital wallet payments: Adoption of mobile payments and digital wallets is increasing in Taiwan, with wallets such as LINE Pay boasting millions of users. Accepting these payment methods can help your business meet the preferences of a tech-savvy population.

• Use QR codes at checkout: Digital wallets such as Jkopay facilitate quick contactless payments through QR codes, saving time for businesses and customers. Incorporate this payment type into your payment process to stay up-to-date with the latest payment trends.

• Embrace local payment methods: Taiwan has a diverse local payment environment in which LINE Pay, Jkopay, and Taiwan Pay have all gained traction. Integrating these options alongside global payment methods can show you understand local preferences and encourage more transactions.

Invest in cybersecurity

• Choose secure payments infrastructure: A secure payment gateway that encrypts financial transaction details such as credit card numbers to safely transmit them is key to fraud mitigation. Pick a payment gateway and payment processor with security in mind.

• Authenticate customer identities: Verifying that customers are who they say they are can reduce fraudulent charges and boost customer confidence. Deploy two-factor authentication and 3D Secure to make verification easier.

• Safeguard customer data at every stage: Keeping customer payment data secure is important for complying with the PDPA and building trust in your business. Also follow the PCI DSS rules for the highest level of data security.

Gain customer trust

• Offer localized customer support: Any issues during the payment process can be a major deterrent for customers. Providing support options in Taiwanese Mandarin, whether through chatbots or live agents, can immediately address any concerns and make the payment process smoother.

• Simplify refund and return policies: Having a straightforward refund and return policy can improve customer trust. Businesses that prioritize a transparent, intuitive process are more likely to see repeat customers.

• Accommodate customers who prefer cash: For customers who prefer to pay in cash for in-person transactions, accommodating their preference can encourage more purchases. If your business is fully online, provide various payment options to give customers the best chance of finding a method that works for them.