Hong Kong's Cards and Payments Industry: New research report available at Fast Market Research

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.

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