Payments around the World - Hong Kong, Macau & Taiwan

Background of the Regions

With a highly developed free market economy, Hong Kong is a largely autonomous metropolis in China. Both as a former British colony that is now one of only two Special Administrative Regions of China, Hong Kong and the other, Macau, have their own distinct economic systems from the rest of the country. However, due to Macau's size and reliance on gaming, Hong Kong's economy is more varied and active.

Taiwan, on the other hand, is also a highly developed free market economy, as well as a geopolitical flashpoint. The latest data shows that the island has surpassed both Japan and South Korea in terms of GDP per capita according to the 2022 estimates.

Most Common Payment Methods

Hong Kong

As a matter of fact, the variety of payment methods nowadays can be quite overwhelming for most people. In Hong Kong, there are three major ways to make a transfer, including Debit / Credit Cards, Digital Wallets, and the good old Cash, of course.

Interestingly, with a far less common use of credit card than other developed regions, the total value of credit card transactions in the city also witnessed a 13.2% decrease in Q1 2022, from the previous quarter, suggesting a trend of increasing digital wallet use.

Popular digital payment platforms include the HSBC-operated PayMe, AliPayHK, Apple Pay, and Octopus Card. Not only did the Covid outbreak fueled the popularity of digital solutions, in fact, the Faster Payment System (FPS) introduced by the Hong Kong Monetary Association (HKMA) has played a key role in as a booster way earlier than the pandemic.

Launched in 2018, FPS has been operated by the Hong Kong Interbank Clearing Ltd, offering infrastructure service that enables instant payments across the city, providing consumers and merchants a safe, efficient and widely accessible retail payment service on a 24/7 basis. To put in another word, FPS collectively connects banks and digital wallets and removes all barriers.

Macau

Macau heavily relies on the gambling industry, which suffers a lot after the pandemic since casinos make money from gamblers traveling from afar. A survey conducted at the end of 2021 regarding the payment method usage shows that Cash remains the priority way of payment (87%), closely followed by “Card-funded mobile payments at physical stores” (62%), Macao Pass (31%) and Credit / Debit cards (30%).

Taiwan

The island is home to 23.9 million people, with 95% of them are banked, 92% have internet access and 88% own smartphones. Statistics about Taiwan also show that 56% of the citizens own credit card, a number much higher than the average of Asia Pacific (29%).

48% of transactions done in Taiwan are card-based, 18% are digital wallets, 14% are bank transfers, 12% are cash-based and the rest are done by other means.

It it worth noting that 20% of all credit card transactions were made with a smartphone, and the number is increasing. LINE Pay is the most popular contactless payment method, used by 9.8 million users during 2021, with over 146 million transactions.

Future Outlook of Payment Markets

From 2022 to 2027, the Hong Kong payment market is predicted to grow at a CAGR of 4.02%. The integration of the payment gateway has grown to be one of the most important components of every firm in any industry. It permits cash collection through the customer's preferred bank without jeopardizing confidential information.

For a market as small as Macau's, it generally shares common trends for its geographical vicinity and economic similarities with that of Hong Kong.

For Taiwan, the mobile payments industry is anticipated to expand at a CAGR of 17.3% (2022 - 2027). To accept and send payments, businesses and services are quickly embracing mobile payment platforms like LINE Pay, Apple Pay, JKOPay, Google Pay (AndroidPay), TaiwanPay, PXPay, and Pi Pay. This trend is anticipated to persist during the projection period due to rising internet usage and the rapid expansion of online retailing.