The Zhitong Finance App learned that a recent survey showed that more and more Hong Kong consumers are using e-wallets instead of credit cards for online shopping. Payment systems company Worldpay published the latest research report “Worldpay Global Payments Report 2024”, showing that in Hong Kong, e-wallets are expected to replace credit cards in different online transaction channels by 2027.

An electronic wallet refers to a physical wallet that can be used as an electronic payment tool for mobile apps and has a value storage function. Bank accounts, credit cards, etc. can add value to e-wallets, but this research report only counts direct credit card payments, and does not mention methods such as credit cards to recharge e-wallets. Other payment methods investigated include cash, debit cards, prepaid cards, and point of sale installment payments.

The survey found that as of 2023, credit cards were still the main payment method in Hong Kong, accounting for 41% of online spending and 52% of store transactions.

However, the report predicts that in the next 3 years, Hong Kong consumers will accelerate their conversion to e-wallets. It is expected that by 2027, 41% of e-commerce spending in Hong Kong will be carried out through e-wallets, while the amount spent via credit card is expected to drop to 32%.

Cash usage in Hong Kong continued to decline, falling by more than half in ten years, accounting for only 9% of store spending.

In terms of store consumption, the gap between credit cards and e-wallets is also narrowing. Credit card spending in Hong Kong stores is expected to shrink from 52% to 43% from 2023 to 2027; e-wallet usage will grow from 27% to 42%. Meanwhile, cash usage in Hong Kong continues to decline. In 2023, cash only accounted for 9% of store consumer transactions, less than half of 22% ten years ago.

Worldpay said that the trend of Hong Kong consumers switching to e-wallets is in line with the Asia-Pacific region and global trends. Furthermore, since stored value payment cards such as Octopus cards are used by the Hong Kong government as distribution channels for consumer vouchers, the total number of such card transactions will increase by 40% year after year in 2023.

China's electronic payment instruments are further dominating. According to the report, China has long led the world in e-wallet usage. In 2023, the transaction volume surpassed nearly US$7.6 trillion, accounting for 69% of total e-commerce and store transactions.

Worldpay predicts that by 2027, the compound annual growth rate of e-wallet consumption on e-commerce platforms will reach a further 13%, and in the field of store consumption, this figure will reach 10%

This trend has made e-wallets the most popular and fastest growing payment method across platforms, benefiting from the rise of QR codes and the opening of major mobile payment providers such as Alipay (Alipay) and WeChat Pay (WeChat Pay) to foreign countries.

By region, in 2023, consumers in the Asia-Pacific region will use e-wallets for 70% of online transactions; during this period, e-wallets became the leading e-commerce payment method in 6 of the 14 markets in the Asia-Pacific region, including China, India, Indonesia, the Philippines, Vietnam, and Australia; Hong Kong, China may join this ranks in 2027.

Daniel So, manager of Worldpay Hong Kong, believes that the popularity of e-wallets, driven by the rapid adoption of new technology and consumer preferences, has given consumers more choice and control in today's era of payment innovation.

He added that mature technology gives consumers confidence to try new payment methods. However, the way they choose to add value to their e-wallets varies from region to region and is influenced by their loyalty to existing payment types such as credit cards.

Daniel So said that consumers' attachment to credit cards is based on incentives such as long-term trust and points. However, as e-wallets continue to develop, in addition to providing payment services, they also provide more personalized services through features such as offers or recommendations to deepen integration into buyer behavior, thereby promoting adoption.