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Hong Kong's Cards and Payments Industry: Emerging Opportunities, Trends, Size, Drivers, Strategies, Products and Competitive Landscape

Published: Jul-2014 | Format: PDF | Timetric | Number of pages: 102 | Code: MRS - 23067

Synopsis

The report provides top-level market analysis, information and insights on Hong Kong's cards and payments industry, including:
Current and forecast values for each category of Hong Kong's cards and payments industry, including debit cards, credit cards, charge cards and prepaid cards
Comprehensive analysis of the industry’s market attractiveness and future growth areas
Analysis of various market drivers and regulations governing Hong Kong's cards and payments industry
Detailed analysis of the marketing strategies adopted for selling debit, credit, charge and prepaid cards used by banks and other institutions in the market
Comprehensive analysis of consumer attitudes and buying preferences for cards
The competitive landscape of Hong Kong's cards and payments industry

Executive summary

In terms of number of cards in circulation, the Hong Kong card payments channel registered positive growth during the review period (2009–2013), recording a compound annual growth rate (CAGR) of 5.23% to reach 50.8 million cards in 2013. In terms of transaction value, the card payments channel valued HKD943.9 billion (US$121.7 billion) in 2013, after registering a CAGR of 10.94%. Improved banking infrastructure and the increasing acceptance of card-based payments at point-of-sale (POS) terminals were key growth drivers for the card payments channel. 

In terms of transaction value, credit cards accounted for the highest share during review period with 51.7% in 2013, and are expected to maintain this over the forecast period (2014−2018). The category is expected to post a forecast-period CAGR of 3.31% from HKD512.1 billion (US$66.0 billion) in 2014 to HKD583.3 billion (US$75.2 billion) in 2018. The second-highest share in terms of transaction value was held by debit cards with 40.9%, followed by prepaid cards (5.7%) and charge cards (1.7%).

The debit card category is anticipated to post a forecast-period CAGR of 1.31%, while the prepaid card category is expected to register a CAGR of 2.56% and the credit card category is projected to record a CAGR of 2.45% over the forecast period. Due to the convenience of electronic payments, the emergence of contactless payment systems and an increase in security features, Hong Kong’s population have been encouraged to perform more card-based transactions. Despite the financial crisis, Hong Kong recorded a growth in credit card expenditure, supported by the increased acceptance of these cards at POS terminals and associated benefits associated such as reward points, discounts and cashback. All the major global card scheme providers − Visa, MasterCard, American Express, Diners Club and JCB International (JCB) − have a presence in the country’s credit card category. 

The prepaid cards category grew at a strong pace during the review period, a trend that is anticipated to continue over the forecast period. The rising demand for Octopus cards supported the category’s growth. Initially developed to be used for public transit systems, the cards are now used for to make payments at car parks, leisure facilities and retail outlets. These cards are compatible with contactless payments, and facilitate faster payments.

Total card fraud in Hong Kong recorded a review-period CAGR of -4.70%, declining from HKD10.5 million (US$1.4 million) in 2009 to HKD8.6 million (US$1.1 million) in 2013. As part of offering enhanced security for automatic teller machine (ATM) transactions, in June 2011, the Hong Kong Monetary Authority (HKMA) announced the implementation of chip-based technology for all ATM services. This process is expected to be completed by the end of 2015.

Scope

This report provides a comprehensive analysis of Hong Kong's cards and payments industry.
It provides current values for Hong Kong's cards and payments industry for 2013, and forecast figures for 2018.
It details the different economic, infrastructural and business drivers affecting Hong Kong's cards and payments industry.
It outlines the current regulatory framework in the industry.
It details the marketing strategies used by various banks and other institutions.
It profiles the major banks in Hong Kong's cards and payments industry.

Key highlights

• In terms of number of cards in circulation, the Hong Kong card payments channel registered positive growth during the review period (2009–2013), recording a compound annual growth rate (CAGR) of 5.23% to reach 50.8 million cards in 2013. In terms of transaction value, the card payments channel valued HKD943.9 billion (US$121.7 billion) in 2013, after registering a CAGR of 10.94%. Improved banking infrastructure and the increasing acceptance of card-based payments at point-of-sale (POS) terminals were key growth drivers for the card payments channel.

• In terms of transaction value, credit cards accounted for the highest share during review period with 51.7% in 2013, and are expected to maintain this over the forecast period (2014−2018). The category is expected to post a forecast-period CAGR of 3.31% from HKD512.1 billion (US$66.0 billion) in 2014 to HKD583.3 billion (US$75.2 billion) in 2018. The second-highest share in terms of transaction value was held by debit cards with 40.9%, followed by prepaid cards (5.7%) and charge cards (1.7%).

• The debit card category is anticipated to post a forecast-period CAGR of 1.31%, while the prepaid card category is expected to register a CAGR of 2.56% and the credit card category is projected to record a CAGR of 2.45% over the forecast period. Due to the convenience of electronic payments, the emergence of contactless payment systems and an increase in security features, Hong Kong’s population have been encouraged to perform more card-based transactions. Despite the financial crisis, Hong Kong recorded a growth in credit card expenditure, supported by the increased acceptance of these cards at POS terminals and associated benefits associated such as reward points, discounts and cashback. All the major global card scheme providers − Visa, MasterCard, American Express, Diners Club and JCB International (JCB) − have a presence in the country’s credit card category.

• The prepaid cards category grew at a strong pace during the review period, a trend that is anticipated to continue over the forecast period. The rising demand for Octopus cards supported the category’s growth. Initially developed to be used for public transit systems, the cards are now used for to make payments at car parks, leisure facilities and retail outlets. These cards are compatible with contactless payments, and facilitate faster payments.

• Total card fraud in Hong Kong recorded a review-period CAGR of -4.70%, declining from HKD10.5 million (US$1.4 million) in 2009 to HKD8.6 million (US$1.1 million) in 2013. As part of offering enhanced security for automatic teller machine (ATM) transactions, in June 2011, the Hong Kong Monetary Authority (HKMA) announced the implementation of chip-based technology for all ATM services. This process is expected to be completed by the end of 2015.

Reasons to buy

Make strategic business decisions using top-level historic and forecast market data related to Hong Kong's cards and payments industry and each market within it.

Understand the key market trends and growth opportunities within Hong Kong's cards and payments industry.

Assess the competitive dynamics in Hong Kong's cards and payments industry.

Gain insights in to the marketing strategies used for selling various card types in Hong Kong.

Gain insights into key regulations governing Hong Kong's cards and payments industry.
1 Executive Summary
2 Analysis of Industry Environment, Key Trends and Drivers
2.1 Payment Infrastructure and Emerging Technologies
2.1.1 ATMs
2.1.2 POS terminals
2.1.3 Internet penetration
2.1.4 Contactless technology
2.1.5 EMV
2.1.6 M-payments
2.2 Business Drivers
2.2.1 Growth of e-commerce
2.2.2 Retail sales value
2.3 Economic Drivers
2.3.1 Nominal GDP per capita
2.3.2 Real GDP growth
2.3.3 Inflation
2.3.4 Government initiatives for economic growth
3 Cards and Payments Industry Share Analysis
3.1 Industry Overview
3.1.1 Cash transactions
3.1.2 Check payments
3.1.3 Direct debits
3.1.4 Credit transfers
3.1.5 Card transactions
4 Regulatory Framework and Card Fraud Statistics
4.1 Regulatory Framework
4.1.1 Regulatory framework
4.1.2 New measures to protect the credit card holders from unreasonable charges
4.1.3 Anti-money laundering framework
4.1.4 Foreign direct investment (FDI) regulations
4.2 Card Fraud Statistics
4.2.1 Card-not-present fraud
4.2.2 Counterfeit cards
4.2.3 Lost or stolen card
4.2.4 Card ID theft
5 Emerging Consumer Attitudes and Trends
5.1 Market Segmentation and Targeting
5.1.1 Retail segment
5.1.2 Corporate segment
5.2 Travel and Tourism Spending
5.2.1 Outbound tourist volume
5.2.2 Outbound tourist spending
6 Analysis of Card Payments and Growth Prospects
6.1 Channel Share Analysis by Card Category
6.2 Size and Forecast of the Card Payments Channel
6.2.1 Analysis by volume of cards in circulation
6.2.2 Analysis by transaction value
7 Analysis of Credit Card Payments and Growth Prospects
7.1 Overall Category Size and Forecast
7.1.1 Analysis by volume of cards in circulation
7.1.2 Analysis by transaction value
7.1.3 Analysis by transaction volume
7.2 Transaction Share Analysis by Channel
7.2.1 Analysis by transaction value
7.2.2 Analysis by transaction volume
7.3 Personal Credit Cards Size and Forecast
7.3.1 Analysis by volume of cards in circulation
7.3.2 Analysis by transaction value
7.3.3 Analysis by transaction volume
7.4 Commercial Credit Cards Size and Forecast
7.4.1 Analysis by number of cards in circulation
7.4.2 Analysis by transaction value
7.4.3 Analysis by transaction volume
7.5 Competitive Landscape
7.5.1 Scheme share analysis
7.5.2 Issuer share analysis
8 Analysis of Debit Card Payments and Growth Prospects
8.1 Overall Category Size and Forecast
8.1.1 Analysis by volume of cards in circulation
8.1.2 Analysis by transaction value
8.1.3 Analysis by transaction volume
8.2 Transaction Share Analysis by Channel
8.2.1 Analysis by transaction value
8.2.2 Analysis by transaction volume
8.3 Competitive Landscape
8.3.1 Scheme share analysis
8.3.2 Issuer share analysis
9 Analysis of Charge Card Payments and Growth Prospects
9.1 Overall Category Size and Forecast
9.1.1 Analysis by volume of cards in circulation
9.1.2 Analysis by transaction value
9.1.3 Analysis by transaction volume
9.2 Transaction Share Analysis by Channel
9.2.1 Analysis by transaction value
9.2.2 Analysis by transaction volume
9.3 Personal Charge Cards Size and Forecast
9.3.1 Analysis by number of cards in circulation
9.3.2 Analysis by transaction value
9.3.3 Analysis by transaction volume
9.4 Commercial Charge Cards Size and Forecast
9.4.1 Analysis by number of cards in circulation
9.4.2 Analysis by transaction value
9.4.3 Analysis by transaction volume
9.5 Competitive Landscape
9.5.1 Scheme share analysis
10 Analysis of Prepaid Card Payments and Growth Prospects
10.1 Overall Category Size and Forecast
10.1.1 Analysis by volume of cards in circulation
10.1.2 Analysis by transaction value
10.2 Open-Loop Prepaid Cards Segment Size and Forecast
10.2.1 Analysis by number of cards in circulation
10.2.2 Analysis by transaction value
10.3 Closed-Loop Prepaid Cards Segment Size and Forecast
10.3.1 Analysis by volume of cards in circulation
10.3.2 Analysis by transaction value
11 Merchant Acquiring
12 Company Profiles of Card Issuers
12.1 HSBC
12.1.1 Key financials
12.1.2 Card portfolio
12.1.3 Strategies
12.2 Standard Chartered Bank (Hong Kong) Ltd
12.2.1 Key financials
12.2.2 Card portfolio
12.2.3 Strategies
12.3 Hang Seng Bank
12.3.1 Key financials
12.3.2 Card portfolio
12.3.3 Strategies
12.4 Citibank Hong Kong
12.4.1 Key financials
12.4.2 Card portfolio
12.4.3 Strategies
12.5 Bank of China (BOC) Hong Kong
12.5.1 Key financials
12.5.2 Card portfolio
12.5.3 Strategies
13 Appendix
13.1 Methodology
13.2 Contact Timetric
13.3 About Timetric
13.4 Timetric’s Services
13.5 Definitions
13.6 Disclaimer

                        
            

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