Hong Kong consumers are using their credit cards more often and spending more on them, in preference to other forms of payment card – a trend expected to continue for the next few years.
An increase in the use of contactless cards, enhanced security on credit-card transactions and changing consumer lifestyles are the main factors behind this growth, according to a new report from market intelligence company Timetric, covering 2010 to 2014.
It forecasts credit-card transacts to grow from 483.1 million last year to 547.3 million in 2019, at an annual growth rate of of 3.17 per cent. Meanwhile, transaction value is set to grow by 4.93 per cent, from US$72.9 billion to $88.3 billion during the same period.
Timetric analyst Manish Sah says lifestyle changes have been one of the major contributors of growth.
“Hongkongers now spend more on lifestyle goods and services, such as smartphones, tablets and recreation services, than ever before, resulting in the increased use of products such as personal loans and credit cards.”
Tertiary education and dining out were also contributing factors.
As its high-income population grows, the demand for premium credit cards is gaining traction in Hong Kong, says the report. Consumers have become more sophisticated, with credit cards becoming an essential part of their lifestyles. This has led to banks offering exclusive benefits and rewards. For example, HSBC launched a reward program in January that offers a cash-back on dining, entertainment and lifestyle expenditure around the world.
Multiple-currency cards are also becoming popular. Banks are increasingly issuing dual- and multiple-currency credit cards to capitalise on the increasing cross-border trade between Hong Kong and mainland China, as well as to cater to the fast-growing Chinese population working and studying in Hong Kong.
This trend was indicated in September when the Hong Kong Monetary Authority released data showing that credit-card sales in Hong Kong had increased 10.3 per cent year on year.