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Hong Kong Country Report

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  • Published Date: May 2022

HONG KONG CARDS AND PAYMENTS REPORT

A comprehensive overview of the cards, payments and consumer banking market in Hong Kong, with clearsighted commentary backed by relevant data.
With the Faster Payment System enjoying one of the deepest penetrations across the world markets surveyed by Argus Advisory Research and a pandemic-prompted boost for e-commerce, app wallets and Stored Value Facility schemes, digitalisation is leading to a permanent reset in the payments market.
Although the regional and international role of Hong Kong is somewhat in flux, there is a place for a digital-first player with regional scope that can meet the needs of its connected and digitally active population.

This is what you will learn from this report:

How this market is shaped by dual-function cards.
The effect of the hugely popular Faster Payment System.
Open Banking possibilities as transactions roll out.
Which methods are gaining ground for e-commerce.
Why credit card profitability has been on the rise.

HONG KONG COUNTRY REPORT | KEY FACTS

  • Hong Kong is a business, trade and financial hub for East Asia and a gateway between China and the rest of the world.
  • Its long-term role however is in doubt through the Chinese government's increasing coolness towards its traditional rights and privileges, culminating in a 2020 security law quashing the pro-democracy wishes of Hong Kongers.
  • During the pandemic, cash payments lost favour, with the city seeing its largest-ever drop between 2020 and 2021 and stimulus vouchers being distributed through mobile wallets.
  • The well-established cards market has been boosted by the enthusiastic uptake of the Octopus smartcard and is supported by wide acceptance and aggressive promotion.
  • Credit cards remain a consumer favourite here: banks work closely with merchant partners to offer some of the world's most lucrative credit card incentives to customers.
  • The debit cards' space is dominated by EPS, which is a function embedded into credit cards or ATM cards.
  • Multifunction cards are common. Many credit cards are combined with EPS debit functionality and/or an Octopus prepaid facility.
  • Pandemic consequences remain in play, accelerating the rate of e-wallet use online and boosting e-commerce.
  • Despite contraction in profits during 2019 and 2020, the credit cards market here has remained profitable.
  • Global Payments and Fiserv are the largest merchant acquirers. EPS is the sole merchant acquirer for all POS domestic debit transactions.

Hong Kong Payments Research | Report Contents

TABLE OF CONTENTS
Demographics and the economy
Payments environment
Cards market
Mobile payments
Profit pool
The networks
Key retail banks and issuers
Acquiring and processing
Online acquiring
Regulatory and other cards market information

Appendices: Hong Kong Payments Data Tables

Appendix I: Demographic and economic indicators

Data table 1: Demographic and economic indicators: 2016-2021. Estimates and forecasts to 2025.
Data table 2: Ownership of key consumer devices: 2016-2021. Estimates and forecasts to 2025.
Data table 3: Internet usage by population: 2016-2021. Estimates and forecasts to 2025.

Appendix II: Payments environment

Data table 4: Access points: 2016-2021. Estimates to 2023.
Data table 5: Account penetration: 2016-2021. Estimates and forecasts to 2025.
Data table 6: Consumer payment trends: 2016-2021. Estimates and forecasts to 2023.
Data table 7: B2C e-commerce payment methods: 2016-2021. Estimates and forecasts to 2023.

Appendix III: Cards market

Data table 8: Total cards payment metrics: 2016-2021. Estimates and forecasts to 2025.
Data table 9: Contactless cards metrics: 2016-2021. Estimates and forecasts to 2025.
Data table 10: Credit card numbers: 2016-2021. Estimates and forecasts to 2025.
Data table 11: Total credit cards metrics: 2016-2021. Estimates and forecasts to 2025.
Data table 12: Credit cards profitability indicators: 2016-2021. Estimates and forecasts to 2025.
Data table 13: Debit cards numbers: 2016-2021. Estimates and forecasts to 2025.
Data table 14: Debit cards metrics: 2016-2021. Estimates and forecasts to 2025.
Data table 15: Prepaid/e-money cards metrics: 2016-2021. Estimates and forecasts to 2025.

Appendix IV: Mobile payments

Data table 16: Stored value facilities: 2016-21. Estimates and forecasts to 2025.
Data table 17: Mobile proximity payment metrics: 2016-21. Estimates and forecasts to 2025.

Appendix V: Profit pool

Data table 18: Hong Kong market profit pool: 2016-20. Estimates and forecasts to 2024 including credit card numbers, billed volumes, outstandings, interest incomes, net interest revenues, merchant revenues, card fee revenues, other non-interest incomes, total revenues, net credit losses, operating expenses, total expenses, pre-tax profits, merchant service charges, rollover rates, APR, net credit losses to outstandings, operating costs to revenues, ROA (pre-tax profits to outstandings).

Appendix VI: Card networks

Data table 19: Networks' credit card market shares: 2016-21. Estimates and forecasts to 2023.
Data table 20: Networks' credit card numbers: 2016-21. Estimates and forecasts to 2023.
Data table 21: Networks' credit card billed volume: 2016-21. Estimates and forecasts to 2023.
Data table 22: Networks' number of credit card transactions: 2016-21. Estimates and forecasts to 2023.
Data table 23: Networks' average credit card transaction value: 2016-21. Estimates and forecasts to 2023.
Data table 24: Networks' debit card market shares: 2016-2021. Estimates and forecasts to 2023.
Data table 25: Networks' debit card numbers: 2016-2021. Estimates and forecasts to 2023.
Data table 26: Networks' debit card billed volume: 2016-2021. Estimates and forecasts to 2023.
Data table 27: Networks' number of debit card transactions: 2016-2021. Estimates and forecasts to 2023.
Data table 28: Networks' average debit card transaction value: 2016-2021. Estimates and forecasts to 2023.

Appendix VII: Key retail banks and issuers

Data table 29: Key credit card issuers market shares by credit card numbers: 2018-2021. Estimates and forecasts to 2023.
Data table 30: Key issuers market shares in credit card outstandings: 2018-2021. Estimates and forecasts to 2023.

Appendix VIII: Acquirers and processing

Data table 31: Merchant acquirer credit card market share: Estimates for 2022.
Data table 32: Credit card merchant service charges: 2016-2021. Estimates and forecasts to 2025.
Data table 33: Merchant acquirer debit card market share: Estimates for 2022.
Data table 34: Debit card merchant service charges: 2016-2021. Estimates and forecasts to 2025.
Data table 35: Credit card issuer/issuing processor relationships
Data table 36: Credit card acquirer/acquiring processor relationships
Data table 37: Credit card issuing processor market shares by card numbers: Estimates for 2022.
Data table 38: Credit card acquiring processor market shares by the number of POS transactions: Estimates for 2022.

Appendix IX: Online acquiring

Data table 39: Online merchant acquirer market share. Estimates for 2022.

Hong Kong Country Report | Selected Extracts

Demographics and Economy
Hong Kong's four key industries – financial services, trading and logistics, tourism and professional services – are the main drivers for the country's economic growth.

Payments Environment
Mobile payments, payment cards and peer-to-peer payments have all shown rapid increases, spurred by the recent $4.6 billion in consumption vouchers issued by the government

Cards market
Hong Kong is a highly developed cards market with high card penetration and a high annual spend per card, driven by a deep and wide acceptance infrastructure and a knowledgeable populace.

Mobile Payments
Mobile payments have grown rapidly, spurred on by governmental initiatives to stimulate the economy, the growing awareness of contactless, high smartphone penetration and increased availability of suitably equipped devices.

Profit Pool
There were more than 19 million Hong Kong credit cards in circulation at the end of 2021, representing a penetration rate of about 288 cards per 100 adults.

Card Networks
Hong Kong has a mature credit cards market with cards issued on all major credit card networks, including Visa, Mastercard, UnionPay, JCB and American Express. Owned by a consortium of Hong Kong banks, EPS has enjoyed an effective monopoly of debit-card provision since 1985.

Key Retail Banks and Issuers
Hong Kong's banking sector is extremely competitive, with a comparatively large number of retail banks for a market of around 7.4 million people.

Acquiring and Processing
Hong Kong currently has a near- universal UnionPay acceptance network, which facilitates spending by mainland Chinese visitors. UnionPay cards are accepted at almost all ATMs. Hong Kong banks generally outsource payment processing services to specialist processors to lower operating costs.

Online Acquiring
Credit cards are the second-most popular online payment method in Hong Kong, accounting for a third of total e-commerce billed volume in 2021. The most popular method is the e-wallet.

Regulatory and Markets Information
HKMA approval is required to carry out banking business activities in Hong Kong. Those authorised by the HKMA are referred to as Authorised Institutions (AIs), of which there are three tiers.

Hong Kong Payments Report | Entities Referenced

2Checkout
33 Financial Services
360° Rewards
AEON Credit Services
AIG Finance
Airwallex
Alibaba
Alipay
Amazon
American Express
Android Pay
Ant Bank
Apple Pay
Asia Miles
AsiaPay
Autotoll
Bank for International Settlements
Bank of China Hong Kong
Bank of Communications Hong Kong
Bank of East Asia
BIS
BOC Credit Card
BOC Hong Kong
BOCHK
Braintree
C&SD
Carousel
Cathay Pacific
Chekiang First Bank
China Construction Bank (Asia)
Circle K
Citibank
CookedDeli
Currenxie
Dah Sing Bank
DBS
Dickson
Diners Club
DTC Association
DTCA
Eastern Miles
eBay
e-CNY
ePaylinks Technology
EPS
EPS EasyCash
eWAY
Facebook Messenger
Faster Payments System
Financial Services and the Treasury Bureau
First Data
First Data Merchant Solutions
Fiserv
FPS
FSTB
Global Payments
Google Pay
Hang Seng Bank
Hang Seng Bank
Harvey Nichols
HKAB
HKJC
HKMA
HKT
HKT Payment
Hong Kong Association of Banks
Hong Kong Book Fair
Hong Kong Census and Statistics Department
Hong Kong Food Expo
Hong Kong General Chamber of Commerce
Hong Kong Interbank Clearing
Hong Kong Jockey Club
Hong Kong Monetary Authority
Hong Kong Telecommunications
HSBC
I.T
iAM Smart
ICBC
IMF
International Monetary Fund
International Telecommunication Union
ITU
JCB
JD
Jetco
Jetco APIX
Joint Electronic Services Teller
Joint Financial Intelligence Unit
Livi Bank
LOG-ON
Mass Transit Railway
Mastercard
Merchant Solutions
Mox
MTR
Neat
O! ePay
Octopus
Octopus O! ePay
Office of the Commissioner of Banking
Office of the Exchange Fund
PayDollar
PayMe
PayPal
PayPass
Peninsula
Phoenix Miles
Planet Payment
PLUS
PPS
PPS Shop&Buy
Prestige for Life
QuickPass
Red Hot Rewards
Samsung Pay
Shanghai Commercial Bank
Sky Pearl Club
Standard Chartered
Stripe
Taobao
Tap & Go
Tencent
Tmall
TNG
Transforex
UniCard Solution
UnionPay
Visa
VisionPLUS
WeChat Pay
WeLab Bank
Wing Lung Bank
World Bank
Yintran Group
ZA Bank
Zalora
ZhongAn Financial Services

MORE ASIA-PACIFIC PAYMENTS REPORTS

Argus Advisory Research reports deliver invaluable market and competitor intelligence on payments cards, e-money, acquiring/processing, retail banking, and consumer credit. Analysts and researchers use both primary and secondary source data and conduct in-depth interviews with senior industry executives and local experts.

See more Asia-Pacific Country Reports or explore the full range of worldwide cards & payments reports available for 72 markets world-wide.

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