The Hong Kong card payments market is forecast to grow at 4.4 percent to hit US$143.5 billion this year on the back of which the gradual economic recovery, rise in consumer spending, and the launch of the Covid vaccination program.
Further, with the gradual reopening of businesses and easing of travel restrictions, the value of card payments is forecasted to register a compound annual growth rate of 3.7 percent to reach US$160.1 billion in 2024, according to GlobalData.
The data and analytics firm said the value of card payments in Hong Kong-registered a marginal growth of 1.2 percent in 2020 due to the fall in consumer spending amid the pandemic.
“The payment card market in Hong Kong is mature with high card penetration of 3.4 cards per inhabitant,’ said Ravi Sharma, GlobalData’s lead banking and payments analyst.
“It also has a high annual spending per card driven by its robust payment infrastructure. Despite this, the market growth decelerated in the past two years due to the global trade war followed by Hong Kong protests about the anti-extradition law movement which affected the country’s economy.
“This was further worsened by the Covid 19 crisis, affecting card payment growth.”
“With Covid 19 restrictions now being eased and consumer spending on the rise, both debit and credit card use is expected to increase. GlobalData predicts that the value of credit and charge cards payment is set to grow by 5 percent in 2021 while debit cards will grow by 3.3 percent during the same period.
As with most markets, the pandemic caused a shift in consumer buying behavior with consumers moving from offline to online purchases. To capitalise on this trend, Sharma said, banks and card operators are offering customised cards to better serve online customers.
The data and analytics firm said contactless cards are becoming popular in Hong Kong for offline purchases, as they help avoid close social contact and prevent the spread of the virus. To push acceptance of contactless payment among merchants, the government introduced a subsidy scheme last October offering US$644.86 to merchants for covering the cost of setting up contactless terminals and maintenance fees.
GlobalData also said banks and payment service providers are also expanding payment infrastructure to support the growing size of electronic payments. For instance, payment services provider SoePay launched a SoftPOS payment acceptance solution in March 2021, which allows contactless payments acceptance with their mobile phone, without the need of any additional card reader.
“Hong Kong has a well-developed card payment market and strong payment infrastructure. While the pandemic has caused a slowdown in growth, it is set to rebound on the backdrop of rising consumer spending,” Sharma concluded.