Hong Kong’s card payments market to hit $106.7b in value by 2026

But rising interest rates and ongoing geopolitical tensions threaten growth.

Hong Kong’s credit and charge card payments market will be valued $106.7b (HK$831.9b) by 2026, according to a report by GlobalData.

Shifting consumer preference towards non-cash payment methods and recovery of consumer spending will push the market to expand at a compound annual growth rate or CAGR of 3.9% in the four years leading up to 2026, the data and analytics company said.

In 2023, the credit and charge card payment value is expected to grow 4.6%.

ALSO READ: Financial stability a priority for Hong Kong: finance secretary

Credit and charge cards accounted for 71% of total card payments by value in 2022. Availability of value-added benefits on credit cards such as reward points, discounts, and cashback, and limited use of domestic EPS debit cards are key reasons for high usage of credit cards in Hong Kong, according to Ravi Sharma, lead banking and payments analyst for GlobalData.

Despite forecasting growth, Sharma warned that the cards market faces headwinds in the near future amidst rising interest rates.

“Rising interest rates will increase borrowing costs on credit cards, thereby discouraging credit card spending in Hong Kong.The ongoing Russia-Ukraine crisis and rising energy prices resulted in economic uncertainty across the world. These factors are weakening consumer confidence about their financial situation and could affect overall spending,” Sharma said.