Despite Hong Kong’s claim as an international, cosmopolitan society, there have been complaints from the tourism sector that the city is lagging behind in technology. For one thing, Hongkongers seem to be not that interested in electronic payments and cashless transactions, and lots of things are still being paid for in cash or by credit card. Some people find this primitive.
As a longstanding financial center with rapid financial developments, Hong Kong has implemented credit card payments for a long time, and there is a lack of incentive to switch.
Were it not for frequent contacts with mainland Chinese counterparts, and the arrival of new payment methods such as Alipay and WeChat Pay in the Hong Kong market, the progress could have been even slower.
Globally, more developed countries or regions with established financial and credit payment systems often take more time to pilot electronic payments or the idea of a cashless society. Nevertheless, change is inevitable, and the only question is whether the change will be gradual or abrupt.
Let is take a look at Sweden, where electronic payments have become advanced compared to the rest of Europe. Over the years, the Swedish government has repeated its advocacy for a cashless society. Of course, there are always some public concerns such as the worry that the elderly or the tourists cannot adapt to it, or that payments will be affected by a cut in power supply or when mobile phones run out of battery, or that shoppers’ privacy of data will be compromised.
Based on the current trend, it seems Sweden will become a cashless society by 2025. Compared to a decade ago, the country’s use of cash has already been reduced by half.
Of course, the younger generation is always the first to embrace change.
According to a survey conducted in 2018 by Riksbank, the central bank of Sweden, the proportion of cash-paying users in Sweden has dropped to 10 percent.
Currently, in China and India, the two largest countries by population size, electronic or cashless payments have become advanced. Nevertheless, authorities are not always very clear-cut in their support of the system.
While the activities of certain elderly people, tourists and foreigners may be affected if cash payment is not accepted, there are also some concerns within Chinese society that a compulsory ban on cash payments is a type of discrimination against certain customers.
But as shown in the example of Sweden, once a spending habit changes, it is often not easy to revert to old ways. Against this backdrop, all the debates are merely a step toward transition.
The full article appeared in the Hong Kong Economic Journal on May 8
Translation by Julie Zhu
[Chinese version 中文版]
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