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2019 J.P. Morgan Global Payment Trends

2019 Global Payments Trends Report - New Zealand Country Insights

NEW ZEALAND INSIGHTS REPORT


Although New Zealand’s e-commerce market is relatively small, strong growth and a high per capita spend are creating exciting opportunities for online merchants, as demand in rural areas catches up with urban centers.

Introduction

 

To date, the New Zealand e-commerce market has been characterized by relatively high per-capita basket spend,1 and a willingness to shop cross-border.2 The industry’s expansion is set to remain on a steady course throughout 2019, in line with the overall outlook for the economy.3 New Zealand’s gross domestic product expanded 2.3 percent year-on-year in the fourth quarter of 2018, slowing slightly from 2.3 percent the previous quarter.4 In similar fashion to Australia, the Reserve Bank of New Zealand has left the cash rate unchanged at 1.75 percent for a prolonged period, and it is expected to remain at current levels for at least the next four quarters.5 The e-commerce market, meanwhile, will be boosted by a trend for increased online spending in New Zealand’s rural areas.6,7

 

This document is based on projected figures and is subject to change at any time.

Rural shoppers and e-commerce events driving sales growth

 

New Zealand is an e-commerce market that is characterized by high cross-border spending, good uptake of e-commerce events such as Black Friday and Singles Day, and strong rural spending growth. These factors have contributed to the country experiencing double-digit business to consumer e-commerce growth since 2015,18 leading to a market worth $4 billion.19

E-commerce now accounts for 8.1 percent of all retail spending in the country.20 A smaller percentage than other highly developed economies included in this report series,* this suggests online shopping still has plenty of room to expand.21

When it comes to areas of geographical opportunity, regional online shopping growth is outpacing growth in urban areas. Online spend has risen 15 percent year-on-year in rural areas, compared with 14 percent growth in urban areas and 12 percent in metropolitan regions,22 perhaps as these areas catch up to e-commerce early-adopters in cities. Looking forward, overall business to consumer e-commerce growth is expected to temper somewhat, slowing down to a compound average growth rate of 8.7 percent to 2021.23

 

Enthusiastic uptake of e-commerce events

 

The average online spend per year is $1,876.24 Online shoppers aged between 30 and 44 are most active, averaging 27 transactions per year.25 However, New Zealanders between 45 and 59 are the biggest spenders, each spending around $2,023 online per year.26

Some 40 percent of men in New Zealand have shopped online, and 38 percent of women.27 Women are more frequent shoppers than men, averaging 23 online transactions a year. However, men tend to spend higher amounts on fewer items – spending almost $27 more per transaction.28 As an example, men spend nearly double the amount women spend per transaction in the health and beauty category.29

While e-shoppers in New Zealand respond positively to seasonal events, this enthusiasm is largely limited to newer e-commerce promotions. Singles Day, Black Friday and Cyber Monday have all proven highly popular,30 with sales for 2018’s Black Friday being the highest-ever seen in the country, an uplift of 20 percent on 2017’s sales.31

 

A key country for cross-border e-commerce

 

While the majority of purchases are made with domestic merchants, cross-border transactions are a highly significant part of New Zealand’s e-commerce market, accounting for 44 percent of total online shopping and $1.8 billion in sales.32,33 The most popular international markets are China (first), the U.S. (second) and the UK (third).34 There is a strong opportunity for international merchants to gain ground, as overseas e-commerce is growing at a more rapid rate than domestic e-commerce – offshore transactions were up by 37 percent and spend increased by 23 percent, compared with the same period the previous year.35

For domestic products, Trade Me, New Zealand’s answer to eBay, is among the most popular and recognizable sites in the country, and is well-established, having launched in 1999.36 When it comes to the products New Zealanders are buying offshore, clothing and footwear dominates, with 54 percent of online spend going to offshore e-commerce merchants in this category.37 Foreign merchants catering to younger demographics may perform particularly well in this market – people aged 30 and below are 50 percent more likely to purchase from abroad than older customers.38

New Zealanders prove to be keen smartphone shoppers

 

Smartphone penetration is particularly high in New Zealand, at 76 percent, ranking it among the highest in our report series.39 This translates into a strong mobile commerce market, with almost a third (31 percent) of e-commerce sales now completed on a mobile device,40 for a total of $1.3 billion in sales.41 Owing to the wide usage of smartphones, mobile commerce sales are expected to expand at a compound annual growth rate of 21.9 percent to 2021,42 beating out desktop-based sales and creating a $2.8 billion market.43

Designing sites and apps that work across multiple platforms, from smartphones to desktops to tablets, will be essential in order to capture a slice of this growth market, with a third of internet users in New Zealand using three or more devices to access the internet each week.44 Apple products are popular – 80 percent of smartphones in the country are iPhones, 10 percent higher than the global average.45 When it comes to shopping, young metropolitan consumers are more likely to use their mobiles for online shopping than older demographics.46 Mobile-first merchants who offer innovative, seamless sites may thus find success with younger New Zealanders: 15 to 24 year olds spend over six hours a week more online on their smartphones compared with the overall average.47

 

A highly banked nation that prefers to pay with plastic

 

Cards take well over half of New Zealand’s e-commerce payments market, used for 56 percent of all transactions and accounting for $2.3 billion of sales.48 The success of cards could be explained in part by the country’s almost complete bank penetration, which is at 99 percent.49 Credit and debit card penetration, at 3.07 per capita, is also high.50

After cards, the next most popular payment method is digital wallets, which have been adopted quickly by New Zealanders: they already occupy a 22 percent stake in the e-commerce payments market,51 a similar rate to Australia.52 Use of digital wallets is predicted to rise swiftly in the next two years, to take 27.7 percent of the market by 2021.53 Popular options are PayPal® and Visa® Checkout.54

There are other synergies with Australian payment trends. Demand for ‘buy now, pay later’ services are proliferating in both countries, in an attempt to draw in new customers and make shopping more affordable for younger shoppers.55 In contrast, cash payments are very low in the country, at just three percent of online payments.56 This figure is expected to drop further to 2.6 percent by 2021.57

Bank transfers take a 17 percent share of the payments space,58 and usage is expected to grow slightly to 2021,59 boosted by use of local platforms such as POLi, which allows consumers to make payments directly from their online bank account to a merchant website, without the need for a credit card. POLi typically clears instantly.60

International merchants collecting personal information and payment data should familiarize themselves with local privacy laws before entering the market. The New Zealand Privacy Act applies to the handling of all personal information collected or held by businesses and stipulates rules on how to gather, utilize and disclose personal information.61 Another domestic law relevant to e-commerce providers is the Electronic Transactions Act, which is intended to provide businesses with increased reliability and enforceability of their electronic transactions.62

Chargeback rates are low but are growing

 

Chargeback rates are at 0.03 percent in the country, which is comparatively low for the Asia Pacific region – China’s chargeback rate, by contrast, stands at 0.4 percent.63 However, New Zealand’s ASB Bank reportedly experienced a significant increase in disputed credit card transactions in 2018, which was attributed to rising e-commerce transactions.64 Customers were disputing charges for online games or subscriptions they were not aware of, or charges incurred after failing to cancel subscriptions once free trial periods ended.65 A rise in card-not-present fraud has also been reported by the country’s Banking Ombudsman, as has an increase in consumer enquiries relating to scams and fraud.66

 

Key takeaways

 

Although New Zealand’s modest e-commerce market might appear underwhelming relative to the other opportunities in the Asia-Pacific region, unique advantages are presented by its consumer base and also the policies of its government. Cross-border transactions are a highly significant part of New Zealand’s online shopping culture with purchases from overseas actually growing at a faster rate than domestic consumption. While online purchases from local retailers currently are subject to a 15 percent goods and services tax, international online purchases avoid this levy. Cards take well over half of New Zealand’s e-commerce payments market, a trend that is set to continue in the foreseeable future.

 

Data may vary from historical figures, due to certain categories being re-stated as new information sources have become available.

* J.P. Morgan 2019 Payments Trends – Global Insights Report series includes the following countries: Australia, Brazil, Canada, China, Hong Kong, India, Indonesia, Japan, Malaysia, Mexico, New Zealand, Singapore, Thailand, Turkey, U.S., Vietnam.

 

For more information, please contact:

Your J.P. Morgan Relationship Manager or visit: https://www.jpmorgan.com/country/US/en/merchant-services/payment-insights

 

This presentation was prepared exclusively for the benefit and internal use of the J.P. Morgan client or potential J.P. Morgan client to whom it is directly delivered and/or addressed (including subsidiaries and affiliates, the “Company”) in order to assist the Company in evaluating, on a preliminary basis, the feasibility of a possible transaction or transactions or other business relationship and does not carry any right of publication or disclosure, in whole or in part, to any other party.  This presentation is for discussion purposes only and is incomplete without reference to, and should be viewed solely in conjunction with, the oral briefing provided by J.P. Morgan.  Neither this presentation nor any of its contents may be disclosed or used for any other purpose without the prior written consent of J.P. Morgan. This presentation does not constitute a commitment by any J.P. Morgan entity to extend or arrange credit or to provide any other services to Company.

In preparing this presentation, we have relied upon and assumed, without independent verification, the accuracy and completeness of all information available from public sources or which was provided to us by or on behalf of the Company or which was otherwise reviewed by us.  The statements, views, and opinions that will be expressed during the presentation are those of the presenters and are not endorsed by, or reflect the views or positions of, J.P. Morgan.  The information herein may not take into account individual client circumstances, objectives or needs and is not necessarily intended as a recommendation of a particular product or strategy to the Company and Company shall make its own independent decision. J.P. Morgan is not liable for decisions made or actions taken in reliance on any of the information covered during the presentation. Furthermore, J.P. Morgan makes no representations as to the actual value which may be received in connection with a transaction or use of the products and services mentioned nor the legal, tax or accounting effects of consummating a transaction.

J.P. Morgan, Chase Paymentech, Chase Merchant Services, JPMorgan and JPMorgan Chase are marketing names for certain businesses of JPMorgan Chase & Co. and its subsidiaries worldwide (collectively, “J.P. Morgan”) and if and as used herein may include as applicable employees or officers of any or all of such entities irrespective of the marketing name used.  Products and services may be provided by commercial bank affiliates, securities affiliates or other J.P. Morgan affiliates or entities.  In particular, securities brokerage services other than those which can be provided by commercial bank affiliates under applicable law will be provided by registered broker/dealer affiliates such as J.P. Morgan Securities LLC, J.P. Morgan Institutional Investments Inc. or by such other affiliates as may be appropriate to provide such services under applicable law.  Such securities are not deposits or other obligations of any such commercial bank, are not guaranteed by any such commercial bank and are not insured by the Federal Deposit Insurance Corporation.  Not all products and services are available in all geographic areas. Eligibility for particular products and services is subject to final determination by J.P. Morgan or its affiliates/subsidiaries.

IRS Circular 230 Disclosure:  J.P. Morgan does not provide tax advice.  Accordingly, any discussion of U.S. tax matters included herein (including any attachments) is not intended or written to be used, and cannot be used, in connection with the promotion, marketing or recommendation by anyone not affiliated with J.P. Morgan of any of the matters addressed herein or for the purpose of avoiding U.S. tax-related penalties.

© 2019 JPMorgan Chase & Co

 

1 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via estimate based on collaboration with national e-commerce associations.

2 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via BNZ & Market View NZ Online Retail Sales, 2018.

3 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via BNZ & Market View NZ Online Retail Sales, 2018.

4 Tradingeconomics.com. New Zealand GDP Annual Growth Rate, 2019. Accessed March 2019

5 Economic Research, J.P. Morgan Chase Bank, February 2019.

6 Economic Research, J.P. Morgan Chase Bank, February 2019.

7 NZPost.co.nz, 2018. ‘2018 New Zealand eCommerce Review.’ Accessed January 2019.

8 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via World Bank, 2017.

9 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via World Bank, 2017.

10 World Bank Open Data. ‘New Zealand.’ Accessed December 2018.

11 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via BNZ & Market View NZ Online Retail Sales, 2018.

12 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via New Zealand Post Limited E-commerce Report, 2018, EDC analysis.

13 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via New Zealand Post Limited E-commerce report, 2018, EDC analysis.

14 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via World Bank, 2017.

15 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via Statista (2017) & Research New Zealand – Smartphones and other mobile devices (2015).

16 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via World Bank, 2017.

17 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, 2018.

18 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via BNZ & Market View NZ Online Retail Sales, 2018.

19 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via BNZ & Market View NZ Online Retail Sales, 2018.

20 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via New Zealand Post Limited E-commerce Report, 2018.

21 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via FEVAD, E-Commerce in France Key Figures, 2018.

22 NZPost.co.nz, 2018. ‘2018 New Zealand eCommerce Review.’ Accessed January 2019.

23 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via New Zealand Post Limited E-commerce report, 2018.

24 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via estimate based on collaboration with national e-commerce associations.

25 NZPost.co.nz, 2018. ‘2018 New Zealand eCommerce Review.’ Accessed January 2019.

26 NZPost.co.nz, 2018. ‘2018 New Zealand eCommerce Review.’ Accessed January 2019.

27 NZPost.co.nz, 2018. ‘2018 New Zealand eCommerce Review.’ Accessed January 2019.

28 NZPost.co.nz, 2018. ‘2018 New Zealand eCommerce Review.’ Accessed January 2019.

29 NZPost.co.nz, 2018. ‘2018 New Zealand eCommerce Review.’ Accessed January 2019.

30 NZPost.co.nz, 2018. ‘2018 New Zealand eCommerce Review.’ Accessed January 2019.

31 NZHerald.conz, December 2018. ‘Boxing Day sales set to surpass record-breaking Black Friday.’ Accessed January 2019.

32 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via BNZ & Market View NZ Online Retail Sales, 2018.

33 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, 2018.

34 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via New Zealand Post Limited E-commerce report, 2018.

35 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via New Zealand Post Limited E-commerce Report, 2018.

36 Wikipedia.org, January 2019. ‘Trade Me.’ Accessed January 2019.

37 NZPost.co.nz, 2018. ‘2018 New Zealand eCommerce Review.’ Accessed January 2019.

38 NZPost.co.nz, 2018. ‘2018 New Zealand eCommerce Review.’ Accessed January 2019.

39 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via Statista (2017) & Research New Zealand - smart phones and other mobile devices, 2015.

40 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via New Zealand Post Limited E-commerce report, 2018, EDC analysis

41 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via New Zealand Post Limited E-commerce report, 2018, EDC analysis

42 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, 2018.

43 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, 2018.

44 Nielsen.com, June 2018. ‘Screen Time Skyrocketing.’ Accessed January 2019.

45 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via New Zealand Post Limited E-commerce Report, 2018.

46 NZPost.co.nz, 2018. ‘2018 New Zealand eCommerce Review.’ Accessed January 2019.

47 Nielsen.com, June 2018. ‘Screen Time Skyrocketing.’ Accessed January 2019.

48 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, 2018.

49 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via World Bank, 2017.

50 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, 2018.

51 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, 2018.

52 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, 2018.

53 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, 2018.

54 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, 2018.

55 NZPost.co.nz, 2018. ‘2018 New Zealand eCommerce Review.’ Accessed January 2019.

56 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, 2018.

57 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, 2018.

58 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, 2018.

59 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company, 2018.

60 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via POLi, 2018.

61 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via Ministry of Business, 2017, OECD, 2017.

62 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via Ministry of Business, 2017, OECD, 2017.

63 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via Kount, 2018.

64 Stuff.co.nz, May 2018. ‘Disputed transactions on the rise due to increased online payments and fraud.’ Accessed January 2019.

65 Stuff.co.nz, May 2018. ‘Disputed transactions on the rise due to increased online payments and fraud.’ Accessed January 2019.

66 Stuff.co.nz, May 2018. ‘Disputed transactions on the rise due to increased online payments and fraud.’ Accessed January 2019.

67 J.P. Morgan 2019 Payments Trends – Global Insights Report: Data has been provided to J.P. Morgan Merchant Services by Edgar, Dunn and Company via Kount and Eurostat, 2017.

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Contact us if you require advice, help or support.

Existing Merchant Service Customers

If you have a technical issue or a question about your merchant account, please call your Relationship Manager directly.
Alternatively, call our merchant support team on:

For Europe: +353 1 726 2909     UK: 0845 399 1130

Further information is available at any time through your Paymentech Online account.

 

Out of Courts Complaints and Redress Procedures

  1. J.P.Morgan has in place complaint resolution procedures to settle complaints of Merchants arising from their rights and obligations under Parts 3 and 4 of the Payment Services Regulations 2018.
  2. If you have a complaint, please contact your Relationship Manager. Your complaint will be addressed in accordance with J.P.Morgan complaint policy, which we are happy to provide upon request.
  3. In the event of a complaint, a Merchant may refer the matter to the Irish Financial Services and Pensions Ombudsman (FSPO) or such relevant out-of-court complaint body or to such other competent out-of-court complaint body applicable to you in the country where you are established.
  4. Details on complainant eligibility are available on the FSPO website.

                   You can contact the FSPO at:

Irish Financial Services and Pensions Ombudsman
Lincoln House
Lincoln Place
Dublin 2
D02 VH29
Ireland
Tel: + 353 1 567 7000
Email: info@fspo.ie
Website: https://www.fspo.ie

 

Merchants domiciled in the UK

  1. From 1st January 2021, J.P.Morgan will enter into the UK's Temporary Permissions Regime (TPR).
  2. The TPR has been established by the UK regulators to allow firms such as J.P.Morgan to continue to operate in the UK following the end of the Brexit transition period.
  3. During the TPR, a UK-based merchant that is not satisfied with our response to a complaint and that qualifies as an eligible complainant may refer the matter to the UK's Financial Ombudsman Service. Details on complainant eligibility are available on the Financial Ombudsman Service website.

                   You can contact the Financial Ombudsman Service at:

Financial Ombudsman Service
Exchange Tower
London
E14 9SR
Free phone: 0800 023 4567
Email: complaint.info@financial-ombudsman.org.uk
Website: www.financial-ombudsman.org.uk