Nearly 70% cite that they remain unfamiliar with the tech required to go cashless.
Cash still reigns supreme as the top payment option in Hong Kong as an overwhelming 99% of residents use it as their regular payment option in the past year compared to the 20% who embrace mobile for their regular payment needs, according to the inaugural AlipayHK Smart Payment Popularity Index released by the Hong Kong Productivity Council.
Around 97% trust the Octopus Card for their payments whilst half (53%) use their credit cards and a fourth (25%) opt for contactless credit card.
A separate report by BMI Research notes that as long as Octopus Card remains dominant for the day-to-day transactions of residents, smaller e-wallet players will face considerable headway in gaining market share and chip away at the dominance held by smart card Octopus which has over 34m stored-value cards in circulation - more than the city’s 7.41m population.
Against the residents’ refusal to part with cash, Hong Kong lags significantly behind China and Switzerland in cashless adoption as citizens do not treat their mobile devices as e-wallets due to a wide array of reasons.
Over half (68%) cite that they refuse to adopt mobile payments because of their unfamiliarity with the tech followed by concerns of data leakage. Almost half (46%) shun cashless because of their satisfaction with current payment methods whilst 36% claim that the application process is too complicated and 32% cite that the number of retailers that accept mobile payments is low.
Despite this dismal figure, around third (29%) of respondents have tried mobile payments in the past. Of this figure, the tech savvy 25-34 age group had the highest adoption rate whilst the older demographic of 50-64 had the lowest adoption rates. In terms of e-wallet provider, Alipay emerges as the top option followed by Wechat Pay and Apple Pay.
Overall, Hong Kong’s Consumer Smart Payment Acceptance level falls at a lacklustre 45.5 out of 100 as this is brought down by residents' low confidence in mobile payments.
Nevertheless, officials remain hopeful about the eventual adoption of mobile payments as they pin their hopes on retailers to encourage the cashless push. “[T]he survey found that a lack of understanding towards in-app operation is the main reason for non-usage. As our merchant and user base grow, we hope an increase in familiarity via our e-wallet will help resolve public misunderstanding towards mobile payment in general,” said Jennifer Tan, CEO, Alipay Payment Services (HK) Limited.
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