Going Cashless: Are Digital Wallets Taking Over in Hong Kong?

More than two years into the pandemic, people around the world have shifted their habits and are now more comfortable at using digital methods to buy in-store and online. PwC’s June 2021 Global Consumer Insights Pulse Survey revealed that consumers have considered themselves more digital, with 39% shopping from their smartphones daily or weekly in June 2021 compared to the 30% rate back in 2020.

As the world continues to embrace digital payments through e-wallets, is Hong Kong doing the same?

E-commerce Payment Trend

A J.P. Morgan report stated that digital wallets are the second most popular payment option in Hong Kong. They are used for 25% of all e-commerce transactions, or US$0.9 billion annually. In terms of other e-commerce payment methods, card transactions are at the highest at 49% followed by bank transfers (10%), cash payments (9%), and other modes of payment (7%).

As digital wallet transactions are expected to grow faster than card transactions, which were the most popular method in 2019, digital wallets are highly likely to become the primary e-commerce payment method by 2024. Phil Pomford, general manager at Fidelity National Information Services, Inc. (FIS Global), said Hong Kong is leading the charge across the Asia-Pacific region as FIS forecast sees paper money and coins to account for no more than 1.6% of point-of-sale (POS) transactions.

Digital Wallets in Hong Kong

Businesses understand that the payment habits created by consumers will stay, even in a post-pandemic future. A digital-first experience will be the key for many merchants in Hong Kong to keep up and put themselves one step ahead of their competitors. The more seamless and convenient the payment methods are, the more consumers will be interested and will continue their purchase for the next transactions to come.

Below are the most-used digital wallets in Hong Kong.

• Alipay

Alipay is China’s leading third-party mobile and online payment platform. Its expansion to Hong Kong gave birth to the AlipayHK brand, which is a standalone app that allows users to shop at popular online merchants and platforms, pay bills, and remit money (for mainland China and the Philippines only). In 2021, the app can now be used to pay public transport fares using a QR code.

• WeChat Pay

The main competitor of Alipay, WeChat Pay is a mobile payment and digital wallet service by China’s WeChat. It’s integrated inside the social and messaging app and appears in the WeChat Wallet section. Users can transfer money to friends, do online shopping, top up their mobile, pay bills (or even their cab ride), and book recreations using the app.

• PayMe

PayMe is a mobile payment service by HSBC for Hong Kong users with local phone numbers and banks. Users can go cashless by simply opening the app’s scanner (swipe left from the home screen) and scanning the PayCode of any business to make instant payments. It also works the other way around by tapping “Pay a business” and letting the cashier scan the user’s code.

• Apple Pay

Apple Pay works with any Apple device, whether an iPhone or Apple Watch. It supports mobile QuickPass so transactions can be made with just a tap. Users can link up to eight credit and debit cards and make secure payments at restaurants, stores, and supermarkets. It uses a device-specific number and unique transaction code so card and banking information won’t be stored in the user’s device.