Consumers in Hong Kong are on the verge of sunsetting cash payments as new online-first shopping habits accelerate in the wake of the pandemic, according to a report released by Worldpay, part of technology company FIS.
The 2021 Global Payments Report forecasts that Hong Kong’s e-commerce market is projected to grow rapidly over the next four years to $29 billion from $21 billion.
Cash use in Hong Kong at the point of sale (point of sale) declined by 17% from 2019, accounting for just 9 percent of in-store payments in 2020. Cash is forecasted to decrease rapidly over the next four years to make up only 1.6 percent of the market in 2024.
“Hong Kong is leading the charge across the region as they accelerate cashless payments,” said Phil Pomford, general manager APAC for Worldpay merchant solutions at FIS.
Credit cards are overwhelmingly the preferred in-store payment method, accounting for more than half (56 percent) of transactions in 2020 and are set to retain this position in 2024.
The overall POS market in Hong Kong is forecast to increase by almost a third (27 percent) over the next four years to reach US$236 billion.
Digital wallets will be the fastest growing in-store payment method. They are projected to account for 36 percent of transactions by 2024, increasing from 22 percent in 2020.
Payments for e-commerce
The e-commerce market in Hong Kong grew significantly in 2020 amid the pandemic and is expected to continue to expand in the next four years. The FIS report found:
- Hong Kong’s eCommerce market, which has predominantly been driven by mobile-based purchases, is forecast to grow by 41 percent over the next four years to $29 billion.
- Credit cards (45 percent), digital wallets (29 percent) and bank transfers (11 percent) were the most popular online payment methods in 2020.
- By 2024, digital wallets are projected to overtake credit cards as the most popular online payment method in Hong Kong, accounting for 37 percent of transactions.
- Pre-paid card and charge & deferred debit cards are projected to be among the fastest growing online payment methods in Hong Kong, increasing at a rate of 18 percent and 22 percent annually, respectively. They are forecast to account for 6 percent and 3 percent of online transactions by 2024, respectively.