Financial Cards in Hong Kong, China
Euromonitor International's Financial Cards in Hong Kong, China report establishes the size and structure of the market for ATMs, credit cards, debit cards, store cards and smart cards. It looks at key players in the market (issuers and operators), number of cards in circulation, numbers transactions and value of transactions. It offers strategic analysis of sector forecasts and trends to watch.
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Tables: 105 | Publication date: Mar 2008
Why buy this report
- Get insight into trends in market performance
- Pinpoint growth sectors and identify factors driving change
- Identify market and brand leaders and understand the competitive environment
Product coverage
Financial cards in circulation; Transactions
Executive summary
Burgeoning economy leads increase in use of financial cards
In 2007, the economy of Hong Kong boomed as a result of consecutive real GDP growth, the bull stock market, and money for investment from Mainland China. The decreased unemployment rate, increased wages and prosperous tourism made consumers willing to spend. Therefore, the use of financial cards – credit cards, debit cards, ATM cards, pre-paid cards, charge cards and smart cards – increased in 2007. Apart from consumption growth, banks focused on wealth management. The intent to shift normal transaction services from counters to ATMs was another reason for the increase in financial cards. The stock market boomed, and the Heng Seng Index grew dramatically, so banks focused on promoting wealth management accounts that linked with premium credit cards. Card issuers, therefore, promoted premium and platinum credit cards rather than standard cards, resulting in the issue of platinum/premium cards being more abundant than standard.
Cards not competitive because of domination by leaders
Excepting credit cards, other financial cards were not very competitive. HSBC Group was the main issuer of ATM cards, with another main issuer being Bank of China. In Hong Kong, one credit card can link with various accounts, meaning that a credit card can be an ATM card and a debit card. Therefore, the leading issuer in one category will also become the leader of other categories. HSBC Group was thus also the ATM and debit card leading issuer in Hong Kong. EPS, as the operator of debit cards, dominated for many years. However, China UnionPay entered, making EPS no longer the monopoly in debit cards. The penetration of ATM cards, debit cards and pre-paid cards was very high: they are inevitable for Hong Kong people. The Octopus Card was widely accepted by transportation and retail outlets, and almost monopolised pre-paid cards. Although Octopus was the only e-purse, it heavily promoted its reward scheme and its brand image via TV commercials in 2007.
Point redemption scheme spreads to pre-paid cards
Card issuers traditionally used discount offers and point redemption schemes to attract consumers to apply for and use financial cards. However, this practice changed with economic environment changes. Credit card issuers focused on luxurious welcome gifts, such as a mobile phone or i-pod: however, they offered less discount on cardholders’ purchases. They no longer sent gift coupons to cardholders to attract them to visit retail outlets. Any available discounts were less than previously. Point redemption schemes not only applied to credit cards, but also to pre-paid cards. The Octopus Card heavily promoted its point rewards scheme via TV commercials and tie-ups with many retail outlets. Octopus aims to enhance its image and further replace the use of cash.
Enhancing the security level of financial cards
Card operators, including Visa, Master and JCB, launched EMV chip cards to enhance security and ensure that cardholders used their cards in a safer way. The EMV chip credit card will replace the exiting magnetic stripe card. This card can effectively protect its data. For e-banking, Visa introduced ‘Verified by Visa’ and Master has ‘Securecode’. Both are measures to encourage cardholders to use their cards. Pre-paid cardholders – Octopus Card – suffered a security issue in 2006 and 2007. It was found that the Automatic Add-value service between Octopus and the nominated bank had wrongly deducted money from clients’ accounts without adding value to their Octopus Cards. This incident damaged the confidence of cardholders in using the Octopus Card.
Growth of financial cards related to cross-border transactions
Financial cards is very mature in Hong Kong. The penetration of ATM, debit, credit and pre-paid cards is high. Among all financial cards, only credit cards and smart cards have potential to grow rapidly. The merchant acceptance of China UnionPay increased rapidly because Mainland tourists used China UnionPay credit cards for payment. China UnionPay launched discount offers to cardholders when purchasing in Hong Kong. The EPS machine can accept China UnionPay as a debit card in Hong Kong. Therefore, the use of China UnionPay credit/debit card will increase over the forecast period.
Table of contents
FINANCIAL CARDS IN HONG KONG, CHINA : MARKET INSIGHT
EXECUTIVE SUMMARY
Burgeoning economy leads increase in use of financial cards
Cards not competitive because of domination by leaders
Point redemption scheme spreads to pre-paid cards
Enhancing the security level of financial cards
Growth of financial cards related to cross-border transactions
KEY TRENDS AND DEVELOPMENTS
Consumption increase led by bullish stock market
Security enhancement of financial cards
Stiff competition in credit cards
Lifestyles change inspires increase of co-branded credit cards
Strategies for boosting use of financial cards
OPERATING ENVIRONMENT
Consumer credit and lending
Issuer fraud
E-commerce
ATM and POS terminals
Cash withdrawal vs card purchases
Governmental regulation and legislation
MARKET INDICATORS
Table 1 Number of POS Terminals 2004-2007
Table 2 Number of ATMs 2004-2007
Table 3 Disposable Income 2002-2007
Table 4 Consumer Credit 2002-2007
Table 5 Value Lost to Fraud 2002-2007
MARKET DATA
Table 6 Financial Cards: Transactions 2002-2007
Table 7 Financial Cards: Value 2002-2007
Table 8 Financial Cards: Number of Cards in Circulation 2002-2007
Table 9 Financial Cards: Number of Accounts 2002-2007
Table 10 Domestic versus Foreign Spend 2007
Table 11 Card Expenditure by Sector 2007
Table 12 Card Expenditure by Location 2007
Table 13 Financial Cards: Number of Internet Transactions 2002-2007
Table 14 Financial Cards: Internet Transaction Value 2002-2007
Table 15 Financial Cards: Number of Cards by Issuer 2002-2006
Table 16 Financial Cards: Number of Cards by Operator 2002-2006
Table 17 Financial Cards: Point of Sale Transactions by Acquirer 2002-2006
Table 18 Financial Cards Forecast: Transactions 2007-2012
Table 19 Financial Cards Forecast: Value 2007-2012
Table 20 Financial Cards Forecast: Number of Cards in Circulation 2007-2012
Table 21 Financial Cards: Forecast Number of Accounts 2007-2012
Table 22 Financial Cards Forecast: Number of Internet Transactions 2007-2012
Table 23 Financial Cards Forecast: Internet Transaction Value 2007-2012
DEFINITIONS
Cards by Type
Cardholder Behaviour
Card Expenditure by Sector
Value Lost to Card Fraud
Consumer Credit
Market Background
Sources
Summary 1 Research Sources
LOCAL COMPANY PROFILES - HONG KONG, CHINA
BANK OF CHINA CREDIT CARD (INTERNATIONAL) LTD - FINANCIAL CARDS - HONG KONG, CHINA
STRATEGIC DIRECTION
KEY FACTS
Summary 2 Bank of China Credit Card (International) Ltd : Key Facts
COMPANY BACKGROUND
COMPETITIVE POSITIONING
HANG SENG BANK LTD - FINANCIAL CARDS - HONG KONG, CHINA
STRATEGIC DIRECTION
KEY FACTS
Summary 3 Hang Seng Bank Ltd: Key Facts
Summary 4 Hang Seng Bank Limited: Operational Indicators
COMPANY BACKGROUND
COMPETITIVE POSITIONING
HONG KONG & SHANGHAI BANKING CORP LTD - FINANCIAL CARDS - HONG KONG, CHINA
STRATEGIC DIRECTION
KEY FACTS
Summary 5 Hong Kong and Shanghai Banking Corp Ltd: Key Facts
Summary 6 Hong Kong and Shanghai Banking Corp Ltd: Operational Indicators
COMPANY BACKGROUND
COMPETITIVE POSITIONING
OCTOPUS CARDS LTD - FINANCIAL CARDS - HONG KONG, CHINA
STRATEGIC DIRECTION
KEY FACTS
Summary 7 Octopus Cards Ltd: Key Facts
Summary 8 Octopus Cards Ltd: Operational Indicators
COMPANY BACKGROUND
COMPETITIVE POSITIONING
STANDARD CHARTERED BANK, HONG KONG - FINANCIAL CARDS - HONG KONG, CHINA
STRATEGIC DIRECTION
KEY FACTS
Summary 9 Standard Chartered Bank, Hong Kong: Key Facts
Summary 10 Standard Chartered Bank, Hong Kong: Operational Indicators
COMPANY BACKGROUND
COMPETITIVE POSITIONING
SMART CARDS IN HONG KONG, CHINA
HEADLINES
TRENDS
COMPETITIVE LANDSCAPE
PROSPECTS
SECTOR DATA
Table 24 Smart Cards Sector Performance: 2002-2007
Table 25 Smart Cards Sector Performance: % Growth 2002-2007
Table 26 Smart Cards: Memory Vs Microprocessor 2004-2007
Table 27 Smart Cards: Contact Vs Contactless 2004-2007
Table 28 Smart Cards: Forecast Sector Performance: 2007-2012
Table 29 Smart Cards: Forecast Sector Performance: % Growth 2007-2012
ATM TRANSACTIONS IN HONG KONG, CHINA
HEADLINES
TRENDS
COMPETITIVE LANDSCAPE
PROSPECTS
SECTOR DATA
Table 30 ATM Cards Sector Performance: 2002-2007
Table 31 ATM Cards Sector Performance: % Growth 2002-2007
Table 32 ATM Cards: Forecast Sector Performance: 2007-2012
Table 33 ATM Cards: Forecast Sector Performance: % Growth 2007-2012
DEBIT TRANSACTIONS IN HONG KONG, CHINA
HEADLINES
TRENDS
COMPETITIVE LANDSCAPE
PROSPECTS
SECTOR DATA
Table 34 Debit Cards Sector Performance: 2002-2007
Table 35 Debit Cards Sector Performance: % Growth 2002-2007
Table 36 Debit Cards: Number of Cards by Issuer 2002-2006
Table 37 Debit Cards: Number of cards by Operator 2002-2006
Table 38 Debit Cards Transactions by Acquirer 2002-2006
Table 39 Debit Cards Transaction Value by Operator 2002-2006
Table 40 Debit Cards: Forecast Sector Performance: 2007-2012
Table 41 Debit Cards: Forecast Sector Performance: % Growth 2007-2012
CREDIT CARD TRANSACTIONS IN HONG KONG, CHINA
HEADLINES
TRENDS
COMPETITIVE LANDSCAPE
PROSPECTS
SECTOR DATA
Table 42 Credit Cards Sector Performance: 2002-2007
Table 43 Credit Cards Sector Performance: % Growth 2002-2007
Table 44 Personal Credit Cards Sector Performance: 2002-2007
Table 45 Personal Credit Cards Sector Performance: % Growth 2002-2007
Table 46 Corporate Credit Cards: Sector Performance: 2002-2007
Table 47 Corporate Credit Cards: Sector Performance: % Growth 2002-2007
Table 48 Credit Cards: Number of Cards by Issuer 2002-2006
Table 49 Credit Cards: Number of cards by Operator 2002-2006
Table 50 Credit Cards Transactions by Acquirer 2002-2006
Table 51 Credit Cards Transaction Value by Operator 2002-2006
Table 52 Personal Credit Cards Transactions by Acquirer 2002-2006
Table 53 Personal Credit Cards Transaction Value by Operator 2002-2006
Table 54 Corporate Credit Cards Transactions by Acquirer 2002-2006
Table 55 Corporate Credit Cards Transaction Value by Operator 2002-2006
Table 56 Credit Cards: Forecast Sector Performance: 2007-2012
Table 57 Credit Cards: Forecast Sector Performance: % Growth 2007-2012
Table 58 Personal Credit Cards: Forecast Sector Performance: 2007-2012
Table 59 Personal Credit Cards: Forecast Sector Performance: % Growth 2007-2012
Table 60 Corporate Credit Cards: Forecast Sector Performance: 2007-2012
Table 61 Corporate Credit Cards: Forecast Sector Performance: % Growth 2007-2012
CHARGE CARD TRANSACTIONS IN HONG KONG, CHINA
HEADLINES
TRENDS
COMPETITIVE LANDSCAPE
PROSPECTS
SECTOR DATA
Table 62 Charge Cards Sector Performance: 2002-2007
Table 63 Charge Cards Sector Performance: % Growth 2002-2007
Table 64 Personal Charge Cards Sector Performance: 2002-2007
Table 65 Personal Charge Cards Sector Performance: % Growth 2002-2007
Table 66 Corporate Charge Cards: Sector Performance: 2002-2007
Table 67 Corporate Charge Cards: Sector Performance: % Growth 2002-2007
Table 68 Charge Cards: Number of Cards by Issuer 2002-2006
Table 69 Charge Cards: Number of cards by Operator 2002-2006
Table 70 Charge Cards Transactions by Acquirer 2002-2006
Table 71 Charge Cards Transaction Value by Operator 2002-2006
Table 72 Personal Charge Cards Transactions by Acquirer 2002-2006
Table 73 Personal Charge Cards Transaction Value by Operator 2002-2006
Table 74 Corporate Charge Cards Transactions by Acquirer 2002-2006
Table 75 Corporate Charge Cards Transaction Value by Operator 2002-2006
Table 76 Charge Cards: Forecast Sector Performance: 2007-2012
Table 77 Charge Cards: Forecast Sector Performance: % Growth 2007-2012
Table 78 Personal Charge Cards: Forecast Sector Performance: 2007-2012
Table 79 Personal Charge Cards: Forecast Sector Performance: % Growth 2007-2012
Table 80 Corporate Charge Cards: Forecast Sector Performance: 2007-2012
Table 81 Corporate Charge Cards: Forecast Sector Performance: % Growth 2007-2012
PRE-PAID CARD TRANSACTIONS IN HONG KONG, CHINA
HEADLINES
TRENDS
COMPETITIVE LANDSCAPE
PROSPECTS
SECTOR DATA
Table 82 Pre-paid Cards Sector Performance: 2002-2007
Table 83 Pre-paid Cards Sector Performance: % Growth 2002-2007
Table 84 Pre-paid Cards: Number of Cards by Issuer 2002-2006
Table 85 Pre-paid Cards: Number of cards by Operator 2002-2006
Table 86 Pre-paid Cards Transactions by Acquirer 2002-2006
Table 87 Pre-paid Cards Transaction Value by Operator 2002-2006
Table 88 Pre-paid Cards by Type 2004-2007
Table 89 Pre-paid Cards: Forecast Sector Performance: 2007-2012
Table 90 Pre-paid Cards: Forecast Sector Performance: % Growth 2007-2012
STORE CARD TRANSACTIONS IN HONG KONG, CHINA
HEADLINES
TRENDS
COMPETITIVE LANDSCAPE
PROSPECTS
SECTOR DATA
Table 91 Store Cards Sector Performance: 2002-2007
Table 92 Store Cards Sector Performance: % Growth 2002-2007
Table 93 Store Cards: Number of Cards by Issuer 2002-2006
Table 94 Store Cards: Forecast Sector Performance: 2007-2012
Table 95 Store Cards: Forecast Sector Performance: % Growth 2007-2012