The Cards and Payments Industry in Hong Kong: Emerging Trends and Opportunities to 2019

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Published: March 02, 2016 Report Code: VR1085MR-ST

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Hong Kong is a global financial hub, with few regulatory barriers for foreign banks and card payment participants. It has close ties with mainland China for smooth cross-border business and trade. The growing payment cards market, coupled with favorable regulations, encourages foreign banks from mainland China and other overseas markets to expand their presence in Hong Kong. Foreign banks such as Bank of China, Citibank and Standard Chartered Bank have a strong presence in the country’s cards and payments industry.
Hong Kong’s payments cards market is highly developed, with a card penetration rate of 3.4 cards per individual in 2014. Furthermore, the average annual spend per card stood at US$4,052.8 in 2014 – higher than in Malaysia, Indonesia, Taiwan and Singapore.
Banking penetration is very high in Hong Kong, recording 96.1% in 2014 according to the World Bank Global Findex survey. To increase this further, the HKMA assigned HSBC, Standard Chartered and Bank of China the role of major financial service providers in November 2015. These banks are responsible for the release of financial products and services in phases to consumers living in rural areas, senior citizens and unbanked consumers. High banking penetration resulted in an increase in the total number of bank accounts, as well as banking products such as consumer loans and payment cards.

Scope

• Detailed insights into payment instruments including check payments, credit transfers, checks, payment cards and cash transactions

• An overview of Hong Kong’s key alternative payment instruments

• A detailed analysis of strategies adopted by banks and other financial institutions to market debit, credit and charge cards in the Hong Kong market

• An analysis of the demographic, economic, infrastructural and business drivers affecting Hong Kong’s cards and payments industry

• An outline of the current regulatory framework in the Hong Kong cards and payments industry

• Profiles of major banks in Hong Kong's cards and payments industry

• Current values for the Hong Kong cards and payments industry and forecast figures up to 2019

Key Highlights

What are banks doing to capitalize on the increasing cross-border trade between Hong Kong and mainland China? What are the other main factors driving these new product initiatives?

Which alternative payment instruments are gaining traction among Hong Kong consumers? What are the key features of these?

What benefits does Visa’ new online payment service, launched at the end of 2015, provide consumers in Hong Kong? Which rival card issuer launched a similar service a month earlier? What are the key differences between the two competing systems?

Reasons to Buy

• Apply GlobalData’s top-level historic and forecast market data to make more informed business decisions in each sector of Hong Kong's cards and payments industry

• Investigate key market trends and growth opportunities to identify those which will increase your share of the market

• Assess the competitive dynamics of Hong Kong’s cards and payments industry to ensure you can maintain your competitive advantage

• Analyze the different strategies adopted for selling various card types and emulate those which provide the best opportunity to enhance your value proposition

• Identify the key regulations governing Hong Kong’s cards and payments industry and ensure you remain compliant

HSBC
Standard Chartered
Bank of China
Citibank
DBS Bank
EPS
Visa
MasterCard
American Express
Diners Club

Table of Contents

1 Definitions and Methodology

1.1 Definitions

1.2 Methodology

2 Key Facts and Events

3 Executive Summary

4 Payment Instruments

4.1 Current Payment Environment

5 E-Commerce

5.1 E-Commerce Market Analysis

6 Alternative Payments

6.1 Alternative Payment Instruments

6.1.1 Octopus

6.1.2 YuuPay

6.1.3 PayPal

6.1.5 MasterPass

7 Regulations in the Cards and Payments Industry

7.1 Regulatory Framework

7.1.1 Measures to bring more transparency with regard to charges on credit cards

7.2 Anti-Money Laundering (AML)

7.3 Foreign Direct Investment (FDI) Regulations

8 Analysis of Cards and Payments Industry Drivers

8.1 Demographic Drivers

8.2 Economic Drivers

8.3 Infrastructure Drivers

8.4 Business Drivers

9 Market Segmentation and New Product Launches

9.1 Market Segmentation and Targeting

9.1.1 Consumer cards

9.1.2 Commercial cards

9.2 New Product Launches

10 Payment Cards

10.1 Payment Card Market Analysis

10.1.1 Volume and value of payment card transactions by type

10.1.2 Personal vs commercial cards

11 Debit Cards

11.1 Debit Card Market Analysis

11.1.1 Debit card transaction volumes and values by channel

11.1.2 Debit card scheme and issuer shares in terms of transaction values

11.1.3 Debit cards comparison

12 Credit Cards

12.1 Credit Card Market Analysis

12.1.1 Credit card transaction volumes and values by channel

12.1.2 Credit card scheme and issuer shares in terms of transaction values

12.1.3 Credit cards comparison

13 Charge Cards

13.1 Charge Card Market Analysis

13.1.1 Charge card transaction volumes and values by channel

13.1.2 Charge card scheme shares in terms of transaction values

14 Commercial Cards

14.1 Commercial Card Market Analysis

14.1.1 Commercial cards comparison

15 Prepaid Cards

15.1 Prepaid Card Market Analysis

15.1.1 Prepaid cards comparison

16 Appendix

16.1 Tables

16.2 Contact GlobalData

16.3 About GlobalData

16.4 GlobalData’s Services

16.5 Disclaimer

Table

Table 1: Key Definitions

Table 2: Annual Average Exchange Rate

Table 3: Hong Kong – Key Facts, 2014

Table 4: Regional Benchmarking of Hong Kong Payment Cards, 2014

Table 5: Hong Kong – Number of Banks, April 2014

Table 6: Hong Kong – Mode of Entry of Foreign Banks

Table 7: Cards for High-Income Consumers, 2015

Table 8: Cards for Travelers, 2015

Table 9: Cards for Travelers, 2015

Table 10: Cards for Shoppers, 2015

Table 11: Commercial Cards Comparison and Key Features, 2015

Table 12: Hong Kong – New Product Launches

Table 13: Hong Kong – Debit Card Comparisons and Key Features, 2015

Table 14: Hong Kong – Gold Credit Cards Comparison and Key Features, 2015

Table 15: Hong Kong – Premium Credit Cards Comparison and Key Features, 2015

Table 16: Hong Kong – Commercial Card Comparisons and Key Features, 2015

Table 17: Hong Kong – Prepaid Cards Comparison and Key Features, 2015

Table 18: Hong Kong – Payment Instrument Transaction Values (HKD Billion), 2010–2014

Table 19: Hong Kong – Payment Instrument Transaction Values (US$ Billion), 2010–2014

Table 20: Hong Kong – Payment Instrument Transaction Volumes (Million), 2010–2014

Table 21: Hong Kong – Number of Payment Cards in Circulation by Type (Million), 2010–2019

Table 22: Hong Kong – Volume of Payment Card Transactions by Type (Million), 2010–2019

Table 23: Hong Kong – Value of Payment Card Transactions by Type (HKD Billion), 2010–2019

Table 24: Hong Kong – Value of Payment Card Transactions by Type (US$ Billion), 2010–2019

Table 25: Hong Kong – Personal and Commercial Card Transaction Volumes ( Million), 2010–2019

Table 26: Hong Kong – Personal and Commercial Card Transaction Values (HKD Billion), 2010–2019

Table 27: Hong Kong – Personal and Commercial Card Transaction Values (US$ Billion), 2010–2019

Table 28: Hong Kong – Number of Debit Cards in Circulation (Million), 2010–2019

Table 29: Hong Kong – Debit Card Transaction Volumes and Frequency by Channel, 2010–2019

Table 30: Hong Kong – Debit Card Total and Average Transaction Values by Channel, 2010–2019

Table 31: Hong Kong – Debit Card Total and Average Transaction Values by Channel, 2010–2019

Table 32: Hong Kong – Number of Debit Cards in Circulation by Scheme (Thousand), 2010–2014

Table 33: Hong Kong – Debit Card Transaction Values by Scheme (HKD Billion), 2010–2014

Table 34: Hong Kong – Debit Card Transaction Values by Scheme (US$ Billion), 2010–2014

Table 35: Hong Kong – Debit Card Transaction Values by Issuer (HKD Billion), 2010–2014

Table 36: Hong Kong – Debit Card Transaction Values by Issuer (US$ Billion), 2010–2014

Table 37: Hong Kong – Number of Credit Cards in Circulation (Million), 2010–2019

Table 38: Hong Kong – Credit Card Transaction Volumes and Frequency by Channel, 2010–2019

Table 39: Hong Kong – Credit Card Total and Average Transaction Values by Channel, 2010–2019

Table 40: Hong Kong – Credit Card Total and Average Transaction Values by Channel, 2010–2019

Table 41: Hong Kong – Number of Credit Cards in Circulation by Scheme (Million), 2010–2014

Table 42: Hong Kong – Credit Card Transaction Values by Scheme (HKD Billion), 2010–2014

Table 43: Hong Kong – Credit Card Transaction Values by Scheme (US$ Billion), 2010–2014

Table 44: Hong Kong – Pay Later Card Transaction Values by Issuer (HKD Billion), 2010–2014

Table 45: Hong Kong – Pay Later Card Transaction Values by Issuer (US$ Billion), 2010–2014

Table 46: Hong Kong – Credit Card Balances Outstanding by Issuer (HKD Billion), 2010–2014

Table 47: Hong Kong – Credit Card Balances Outstanding by Issuer (US$ Billion), 2010–2014

Table 48: Hong Kong – Number of Charge Cards in Circulation (Thousand), 2010–2019

Table 49: Hong Kong – Charge Card Transaction Volumes and Frequency by Channel, 2010–2019

Table 50: Hong Kong – Charge Card Total and Average Transaction Values by Channel, 2010–2019

Table 51: Hong Kong – Charge Card Total and Average Transaction Values by Channel, 2010–2019

Table 52: Hong Kong – Number of Charge Cards in Circulation by Scheme (Thousand), 2010–2014

Table 53: Hong Kong – Charge Card Transaction Values by Scheme (HKD Billion), 2010–2014

Table 54: Hong Kong – Charge Card Transaction Values by Scheme (US$ Million), 2010–2014

Table 55: Hong Kong – Number of Commercial Cards in Circulation (Million), 2010–2019

Table 56: Hong Kong – Commercial Card Transaction Values (HKD Billion), 2010–2019

Table 57: Hong Kong – Commercial Card Transaction Values (US$ Billion), 2010–2019

Table 58: Hong Kong – Number of Prepaid Cards in Circulation (Million), 2010–2019

Table 59: Hong Kong – Prepaid Card Transaction Values (HKD Billion), 2010–2019

Table 60: Hong Kong – Prepaid Card Transaction Values (US$ Billion), 2010–2019

Figures

Figure 1: Hong Kong – Payment Instrument Shares by Transaction Value (%), 2010 and 2014

Figure 2: Hong Kong – Payment Instrument Shares by Transaction Volume (%), 2010 and 2014

Figure 3: Hong Kong – E-Commerce Value (US$ Billion), 2010–2019

Figure 4: Hong Kong – Total Population and Structure

Figure 5: Hong Kong – Economic Indicators, 2010–2019

Figure 6: Hong Kong – Number of ATMs, POS Terminals and Commercial Bank Branches

Figure 7: Hong Kong – Retail Sales and Real Household Consumption, 2010–2014

Figure 8: Hong Kong – Cards and Payments Industry Segmentation by Card Type, 2015

Figure 9: Hong Kong – Growth in Payment Card Transaction Values and Number of Cards in Circulation by Type, 2010–2019

Figure 10: Hong Kong – Volume and Value of Payment Card Transactions by Type (%), 2010–2019

Figure 11: Hong Kong – Personal and Commercial Card, Transaction Volumes and Values (%), 2010–2019

Figure 12: Hong Kong – Growth in Debit Card Transaction Values and Number of Debit Cards in Circulation, 2010–2019

Figure 13: Hong Kong – Debit Card Transaction Volumes and Values by Channel, 2010–2019

Figure 14: Hong Kong – Debit Card Scheme and Issuer Shares in Terms of Transaction Values (%), 2014

Figure 15: Hong Kong – Growth in Credit Card Transaction Values and Number of Credit Cards in Circulation, 2010–2019

Figure 16: Hong Kong – Credit Card Transaction Volumes and Values by Channel, 2010–2019

Figure 17: Hong Kong – Credit Card Scheme and Issuer Shares in Terms of Transaction Values (%), 2014

Figure 18: Hong Kong – Growth in Charge Card Transaction Values and Number of Charge Cards in Circulation, 2010–2019

Figure 19: Hong Kong – Charge Card Transaction Volumes and Values by Channel, 2010–2019

Figure 20: Hong Kong – Charge Card Scheme Shares in Terms of Transaction Values (%), 2014

Figure 21: Hong Kong – Number of Commercial Cards in Circulation and Transaction Value, 2010–2019

Figure 22: Hong Kong – Number of Prepaid Cards in Circulation and Transaction Value, 2010–2019

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