New figures from GlobalData have found mobile wallets are set to surpass traditional payment methods as the preferred way to pay in Hong Kong, forecast to reach $30 billion by 2027.
This comes after the value of mobile wallet payments in Hong Kong grew at a compound annual growth rate (CAGR) of 13.3 per cent between 2018 and 2022, reaching $19.8 billion in 2022. GlobalData has projected a CAGR of 10.1 per cent between 2023 and 2027.
The analytics firm attributed the growth in digital wallet adoption in Hong Kong to the COVID-19 pandemic with the majority of consumers turning to contactless payment methods. GlobalData’s 2022 Financial Services Consumer Survey showed that 89 per cent of Hong Kong customers have a mobile wallet and used it to make payments. This represents a growth of 14 per cent from the pre-COVID period.
“Mobile wallet usage is all set to disrupt the consumer payments space in Hong Kong and gradually displace cash,” Ravi Sharma, Lead Banking & Payments Analyst at GlobalData, said.
“Widespread QR code infrastructure, the availability of mobile-based instant payment systems, and rising consumer and merchant preference have pushed mobile wallet usage in the country.
“Growing usage of the country’s instant payment scheme – Faster Payment System (FPS), has also accelerated mobile wallet adoption. With its QR code functionality, FPS allows users to make mobile-based payments to merchants by scanning a QR code, in addition to regular P2P transfers. As of April 2023, 35 banks and 10 payment service providers supported the FPS.”
The Hong Kong government has also driven the uptake of mobile wallets by investing in building the relevant infrastructure, introducing initiatives like Hong Kong Common QR Code (HKQR) that combines QR codes from multiple payment service providers into one.
Payment providers have also expanded their offering to include digital wallet services, supporting the rise in adoption among Hong Kong consumers.
“Mobile wallet is gradually becoming a mainstream payment solution in Hong Kong, driven by government push, robust mobile payment infrastructure, and the proliferation of mobile wallet brands. This will help push the government’s broader objectives of moving towards a ‘less-cash’ economy,” Sharma said.