20 April 2019
About 50% of transactions in Hong Kong are already cashless, says Rachel Lam, managing director of
About 50% of transactions in Hong Kong are already cashless, says Rachel Lam, managing director of

Contactless payments seen growing in popularity in HK

There seems to a view that Hong Kong is lagging behind neighboring cities in development of cashless payments. The fact, however, is that cashless payment methods have been implemented in Hong Kong long time ago, with a penetration rate much higher than in other countries. We are talking about credit cards.

Hong Kong people have at least three credit cards on average, according to the third-quarter survey of TransUnion last year. The number of credit card accounts in the city surged 1.2 percent to 18.58 million during the three months ended September.

Hongkongers are used to paying their bills with credit cards, accounting for half of the transactions. Contactless payment has now become increasingly popular in the city and is a new development trend.

Travel rewards programs can have big differences among credit cards, ranging from HK$2.78 per mile to up to HK$25 per mile, according to a survey released by the Consumer Council in December last December. For example, the amount of spending to redeem a return ticket between Hong Kong and Osaka can vary from HK$83,400 to HK$750,000.

One-stop banking platform

To maximize the rewards, consumers should better compare their credit cards carefully with online information, says Rachel Lam, managing director of

“When Hong Kong consumers look for banking products and services, such as credit cards, insurance schemes, bank accounts and private loans, they tend to go to the banks they have been using for a long time. They want it convenient and easy-to-handle. Many people rarely spend time on comparing different platforms to pick the one that can suit their needs,” she noted.

Lam said this is why MoneyHero was established four years ago. She said the platform helps consumers compare a range of financial products and services so that they can make their financial decisions wisely.

What Hongkongers want

Over the last four years, the parent company of has launched websites in seven places, namely Hong Kong, Taiwan, Singapore, Malaysia, Indonesia, Thailand and Philippines, to help users compare different local financial products and services.

Demand from customers about credit cards varies in different places, saiys the company, based on observations in various countries.

For example, Germans are reluctant to use credit cards as they have negative perceptions about spending in advance. US people are familiar with credit cards, so it is difficult for them to change their payment behavior. Therefore, electronic payment is popular in the US.

Relatively, demand from Hong Kong customers is rather straightforward. “People in other places care more about how they can benefit from a credit card over the long run. But Hongkongers prefer short-term benefits, such as welcome gifts,” Lam added.

Different age groups

Among different age groups, consumers also show different preferences when choosing credit card services. Data shows that millennials like to compare travel rewards schemes of different credit cards as many of them are frequent travelers, who make trips up to four times a year.

Due to the rising demand from millennials, many banks have started launching credit cards that compete in their travel rewards plans in recent years. “Young people are savvy consumers, who know how to redeem an air ticket in the most cost-efficient way,” Lam said.

By contrast, middle-aged and senior consumers are in general reluctant to spend time on comparisons. “They don’t want to go through lengthy or complicated procedures for a gift. Instead, they would prefer cash dollars,” she said.

Several banks identified such trend a year ago and started launching credit cards for those who prefer cash dollars. Targeting these customers, the mainstream cashback-rate of credit cards in Hong Kong has been increased to 2 percent from the previous level of 1 percent.

Contactless payment market

Contactless payment will the next battlefield for credit card companies, says Lam.

“While mobile apps such as Apple Pay become more and more popular, consumers will no longer have to carry dozens of credit cards, but can link the credit cards to their cell phones,” she said. “Transactions will be not only more convenient, but also faster, safer and will ensure easier-to-keep-records for customers.”

Given a big leap in technology and the fact that Hong Kong is one of the first places in adopting contactless payment, it’s just a matter of time that consumers here will start using contactless credit cards, Lam said.

In February, Visa launched several Near Field Communication (NFC)-enabled wearable payment products, including contactless payment-enabled gloves, stickers and memorial badges, during the Winter Olympics 2018 in PyeongChang in South Korea.

It was convenient for sport fans and athletes to shop with their contactless payment-enabled gloves as they didn’t have to take off their gloves to make payments in an average temperature of minus 4.8°C in PyeongChang during the event.

In the last quarter of 2017, enquiries and website visits about contactless payments have surged 150 percent from the previous quarter in Hong Kong, according to data from It showed that contactless payment has been a market focus in the city.

Lam said a lot of banks and credit card companies are aggressively promoting contactless payment for mobile phones. Some even offered full rebate for a spending of HK$50. These companies don’t mind losing money in the initial stage as they know that consumer habits will not change easily once people begin adopting a payment method Therefore, they are trying every method to attract customers and snap up more market share in the first place, Lam added.

Hong Kong has been a pioneer in transforming itself to a cashless society, she says. “Hong Kong people like to use credit cards in most places, except in the wet market. I think Hong Kong is a cashless city.” 

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