Almost 70 percent of department store customers in Taiwan use credit cards to pay for their purchases, a survey conducted by the Ministry of Economic Affairs (MOEA) showed on Saturday.
Citing the survey, the ministry said that department store operators tend to work with credit card issuing banks, particularly for special events, such as store anniversaries and Mother’s Day, when discounts are available to customers who pay with credit cards.
Consumers who make large purchases tend to pay with credit cards because of the convenience, the ministry said.
As a result, 66.1 percent of department store customers paid by credit card, followed by 26.1 percent who paid in cash and 5 percent who used store-issued vouchers, the ministry said.
However, the survey found that cash remains the most popular method of payment in supermarkets, convenience stores, restaurants, beverage stores and tobacco vendors, accounting for more than 70 percent of payments.
Credit card payments for virtual retailers accounted for 71.1 percent of total payments, the ministry said, adding that online retailers tend to work closely with banks to allow consumers to pay in installments, which reduces the financial burden of their purchases.
According to the survey, when consumers make big-ticket purchases such as of cars or motorcycles, the down payment is generally paid in cash, with a credit card or debit card, while the balance is paid by check or bank remittance.
In the retail sector as a whole, 48.1 percent of consumers prefer to pay in cash, while 35.6 percent use credit cards.
Meanwhile, the ministry said that revenue generated by local retailers hit a record high of NT$4.02 trillion (US$128 billion) last year, up 0.3 percent from a year earlier despite a slowdown in the local economy.
The ministry said that due to an increase in shipments and lower operating costs, net profit in the local retail sector last year rose 13.8 percent year-on-year to NT$251.6 billion, while operating margins rose an annual 0.7 percentage points to 6.3 percent.
Food and beverage businesses made a net profit of NT$59.2 billion last year, up 20.7 percent from a year earlier, partly due to cost cutting efforts which resulted in an operating margin of 14 percent, up 2.1 percentage points year-on-year, the ministry said.
The relatively low comparison base in the previous year also contributed to the significant increase in net profit, the ministry said.
However, sales in the local wholesale sector fell 3.9 percent year-on-year to NT$9.73 trillion last year in the wake of weaker global demand for commodities and energy, the ministry said.
The decline in sales in the wholesale sector was also caused by an increase in the sale of cheap foreign made steel products on the local market, the ministry said.
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