Mobile wallet usage is on the rise in the Asia-Pacific (APAC) region, a trend that is prevalent in Hong Kong as well. The COVID-19 pandemic has accelerated mobile wallet adoption as consumers are increasingly displacing cash with electronic payments, according to GlobalData, a leading data and analytics company.
According to the latest GlobalData’s 2021 Financial Services Consumer Survey*, Hong Kong ranks fourth globally in terms of mobile wallet adoption with 86.6% survey respondents indicating that they had a mobile wallet and used in a shop in the past 12 months.
Ravi Sharma, Lead Banking and Payment Analyst at GlobalData, comments: “Mobile wallet usage is all set to disrupt consumer payment space in Hong Kong with the gradual decline in cash usage. Widespread QR code infrastructure, availability of instant payment system, and rising consumer and merchant preference for electronic payments have pushed the mobile wallet usage. The COVID-19 pandemic further accelerated this trend as consumers are switching from cash to digital payments.”
The country has been investing in building infrastructure for mobile wallet payments, with Hong Kong Common QR Code (HKQR) code being one such initiative. In September 2018, Hong Kong Monetary Authority (HKMA) launched Hong Kong Common QR Code (HKQR) standards combining QR codes from different payment service providers into a single QR code. As a result, merchants now do not need to display multiple QR codes to accept payments.
The introduction of instant payments complimented HKQR in driving mobile wallet adoption and usage in the country. HKMA launched instant payment scheme named Faster payment System (FPS) in the same month. In addition to facilitating real time fund transfers between bank accounts, FPS also supports QR-code based merchant payments. As of November 2021, 35 banks and 10 payment solution providers support FPS.
The high adoption of QR code-based payments among merchants has been the major driver for mobile wallet adoption. While consumers benefit from the convenience and pricing benefits such as cashback and discounts, it is the ‘cost-effectiveness’ that appeals to the merchants.
With mobile wallet usage on rise, banks, and payment service providers (PSPs) are all gearing up to get a piece of the mobile wallet pie. According to GlobalData’s 2021 Financial Services Consumer Survey*, AlipayHK and PayPal are the most preferred mobile wallet brands with over 48% of the respondents using these more often to pay in stores. These are followed by other well-known brands including Apple Pay, Google Pay, WeChat Pay and Samsung Pay.
Mr Sharma concludes: “Wide QR code acceptance, coupled with rising consumer preference for non-cash payments, will further accelerate mobile wallet-based payments in Hong Kong.”