Hong Kong Payments Market - Growth, Trends, COVID-19 Impact, and Forecast (2022-2027)

The Hong Kong Payment Market is Segmented by Mode of Payment (Point of Sale (Card Payments, Digital Wallet, Cash), Online Sale (Card Payments, Digital Wallet)), and by End-user Industries (Retail, Entertainment, Healthcare, Hospitality).

Market Snapshot

Hong Kong Payments Market Size
Study Period: 2020-2027
Base Year: 2021
CAGR: 4.02 %

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Market Overview

The Hong Kong payment market is expected to register a CAGR of 4.02% during the forecast period 2022 to 2027. The payment gateway integration has become one of the most critical aspects of any business in every industry. It allows collecting money through the customer's preferred bank without compromising sensitive data.

  • Consumers' preferences for online payments are shifting as internet penetration and awareness of the ease of online transactions grow. Users gain trust in moving to online transactions as a result of the hassle-free transactions. Payment gateway market expansion in Hong Kong is fueled by the rising usage of online payment methods.
  • After cash, payment cards are the second most prevalent payment method in Hong Kong. The government and financial institutions have worked hard to encourage electronic payment systems, which has resulted in a well-developed payment card sector. They achieved it by eliminating minimum balance fees on bank accounts, opening digital-only banks, and developing and expanding payment acceptance infrastructure.
  • In Hong Kong's banking market, the rise of digital-only banks is likely to create competition. The government and regulatory bodies have also taken initiatives to encourage people to utilize cashless payment systems.
  • Consumers in Hong Kong have steadily used payment cards for low-value transactions as contactless technology has become more widely available. Cash usage decreased as a result of the COVID-19 pandemic. The growing number of online shoppers has aided payment card market growth.
  • COVID-19 has increased card payment knowledge and usage. Companies primarily use credit transfers to pay salaries, make payments to suppliers, and pay taxes. Individuals can use the e-Cheque service to generate electronic cheques with digital signatures using internet banking.

Scope of the Report

Payments are increasingly becoming cashless, and the industry's role in fostering inclusion has become a top priority. Payments contribute to developing digital economies and drive innovation, all while serving as a stable backbone worldwide.

The payments market is divided into two segments: POS and e-commerce. E-commerce payments include online purchases of goods and services, such as purchases made on e-commerce websites and online travel and hospitality bookings. In terms of POS, all transactions that take place at a physical point of sale are included in the market's scope.

By Mode of Payment
Point of Sale
Card Payments (includes Debit Cards, Credit Cards, Bank Financing Prepaid Cards)
Digital Wallet (includes Mobile Wallets)
Cash
Others
Online Sale
Card Payments (includes Debit Cards, Credit Cards, Bank Financing Prepaid Cards)
Digital Wallet (includes Mobile Wallets)
Others (includes Cash on Delivery, Bank Transfer, and Buy Now, Pay Later)
By End-user Industry
Retail
Entertainment
Healthcare
Hospitality
Other End-user Industries

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Key Market Trends

Integration of Payment Gateways

  • Hong Kong introduced electronic direct debit permission for pre-authorization by payers. Several APAC markets are looking towards real-time cross-border payments that connect numerous domestic systems. Hong Kong and Taiwan follow Thailand, Malaysia, and Singapore in allowing foreign transfers for consumer, remittance, retail, and commercial purposes.
  • In Hong Kong, the trend to real-time payments is frequently fueled by strong government support as the city strives to modernize its economy and engage more individuals in digital finance. In Hong Kong, the real-time Faster Payments Service (FPS) has nearly tripled in volume and almost doubled in value transacted.
  • In Hong Kong, credit cards are required, and the schemes are numerous: American Express, UnionPay International, EPS, Mastercard, and Visa are all extensively used by online shoppers. AlipayHK, Apple Pay, Octopus e-wallet, PayMe, and WeChat Pay HK are among the most popular digital wallets in Hong Kong, and they are essential for capturing sales.
Hong Kong Payments Market Trends

Initiatives by the government to advance in digital payments

  • The Hong Kong Monetary Authority (HKMA) has announced a slew of initiatives aimed at preparing Hong Kong for the New Era of Smart Banking. Faster Payment System (FPS) for both banks and Stored Value Facilities (SVF) operators are one of the projects. This enables payments in Hong Kong dollars and Renminbi to be made at any time and from any location using mobile phone numbers or email addresses.
  • In addition, the HKMA established a new task force to collaborate with the banking industry to reduce regulatory frictions in consumers' digital experiences, such as remote onboarding, online finance, and online wealth management. In addition, a policy framework on Open API was developed to assist the banking sector in the development and use of API, thereby driving innovation and improving financial services through collaboration between banks and IT enterprises.
Hong Kong Payments Market Growth

Competitive Landscape

The Hong Kong payments market is moderately competitive. The companies operating in the market are executing mergers, acquisitions, and strategic partnerships to gain market share. Significant players include HSBC, Bank of China, Bank of East Asia, and Standard Chartered Bank. A few recent developments are:

  • May 2022 - HSBC announced a USD 5 billion sustainable finance program to help businesses in the Greater Bay Area (GBA) reduce their carbon footprints. The bank's GBA Sustainability Fund, which runs for 18 months, will accept applications from businesses of all kinds headquartered in the 11-city megalopolis in southern China that engage in carbon-reduction measures.
  • May 2020 - Long Win Bus Company, based in Hong Kong, began accepting contactless Mastercard, Visa, and China UnionPay credit cards for bus fares in May 2020 to capitalize on the expanding usage of contactless payments. Customers can use digital wallets such as Alipay and UnionPay to scan the QR code available on bus e-payment terminals to make payments and contactless payment cards.

Recent Developments

  • May 2022 - Bank of China (Hong Kong) (“BOCHK”) announced the launch of Hong Kong’s first Green Personal Loan following its introduction of a pioneering Green Mortgage Plan last year. As an initial step to encourage the adoption of green transport and promote zero carbon emissions in the city, the bank will offer preferential loans to customers interested in buying electric vehicles (EVs) to support Hong Kong’s objective to achieve “carbon neutrality” by 2050.
  • April 2022 - Standard Chartered Bank (Hong Kong) Limited announced a new partnership with The Sandbox to create innovative experiences for our clients and the community. SCBHK is the first bank to acquire virtual land at The Sandbox metaverse’s Mega-City district, a culture hub based on or inspired by Hong Kong talents.

Table of Contents

  1. 1. INTRODUCTION

    1. 1.1 Study Assumptions and Market Definitions

    2. 1.2 Scope of the Study

  2. 2. RESEARCH METHODOLOGY

  3. 3. EXECUTIVE SUMMARY

  4. 4. MARKET INSIGHTS

    1. 4.1 Market Overview

    2. 4.2 Industry Stakeholder Analysis

    3. 4.3 Industry Attractiveness-Porter's Five Force Analysis

      1. 4.3.1 Bargaining Power of Suppliers

      2. 4.3.2 Bargaining Power of Buyers/Consumers

      3. 4.3.3 Threat of New Entrants

      4. 4.3.4 Threat of Substitute Products

      5. 4.3.5 Intensity of Competitive Rivalry

    4. 4.4 Evolution of the payments landscape in the country

    5. 4.5 Key market trends pertaining to the growth of cashless transaction in the country

    6. 4.6 Impact of COVID-19 on the payments market in the country

  5. 5. MARKET DYNAMICS

    1. 5.1 Market Drivers

      1. 5.1.1 Integration of Payment Gateways

      2. 5.1.2 Initiatives by the government to advance in digital Payments

    2. 5.2 Market Challenges

      1. 5.2.1 Lack of a standard legislative policy remains especially in the case of cross-border transactions

    3. 5.3 Market Opportunities

      1. 5.3.1 Move towards Cashless Society

      2. 5.3.2 New Entrants to Drive Innovation Leading to Higher Adoption

    4. 5.4 Key Regulations and Standards in the Digital Payments Industry

    5. 5.5 Analysis of major case studies and use-cases

    6. 5.6 Analysis of key demographic trends and patterns related to payments industry in Hong Kong (Coverage to include Population, Internet Penetration, Banking Penetration/Unbanking Population, Age & Income etc.)

    7. 5.7 Analysis of the increasing emphasis on customer satisfaction and convergence of global trends in Hong Kong

    8. 5.8 Analysis of cash displacement and rise of contactless payment modes in Hong Kong

  6. 6. Market Segmentation

    1. 6.1 By Mode of Payment

      1. 6.1.1 Point of Sale

        1. 6.1.1.1 Card Payments (includes Debit Cards, Credit Cards, Bank Financing Prepaid Cards)

        2. 6.1.1.2 Digital Wallet (includes Mobile Wallets)

        3. 6.1.1.3 Cash

        4. 6.1.1.4 Others

      2. 6.1.2 Online Sale

        1. 6.1.2.1 Card Payments (includes Debit Cards, Credit Cards, Bank Financing Prepaid Cards)

        2. 6.1.2.2 Digital Wallet (includes Mobile Wallets)

        3. 6.1.2.3 Others (includes Cash on Delivery, Bank Transfer, and Buy Now, Pay Later)

    2. 6.2 By End-user Industry

      1. 6.2.1 Retail

      2. 6.2.2 Entertainment

      3. 6.2.3 Healthcare

      4. 6.2.4 Hospitality

      5. 6.2.5 Other End-user Industries

  7. 7. Competitive Landscape

    1. 7.1 Company Profiles

      1. 7.1.1 HSBC

      2. 7.1.2 Bank of China

      3. 7.1.3 Bank of East Asia

      4. 7.1.4 Standard Chartered Bank

      5. 7.1.5 Citibank

      6. 7.1.6 EPS

      7. 7.1.7 Visa

      8. 7.1.8 Mastercard

      9. 7.1.9 American Express

      10. 7.1.10 Diners Club

    2. *List Not Exhaustive
  8. 8. Investment Analysis

  9. 9. Future Outlook of the Market

**Subject to Availability

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Frequently Asked Questions

The Hong Kong Payments Market market is studied from 2020 - 2027.

The Hong Kong Payments Market is growing at a CAGR of 4.02% over the next 5 years.

HSBC, Bank of East Asia, Standard Chartered Bank, Citibank, EPS, Visa, Mastercard, American Express, Diners Club are the major companies operating in Hong Kong Payments Market.

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