The emergence of various smart payment tools in recent years has given birth to new payment models. The Hong Kong Productivity Council (HKPC) today (4 July 2018) released the inaugural “AlipayHK Smart Payment Popularity Index”, which reports an Overall Index at 53.9 (maximum being 100) – indicating that the concept of "smart payment" is gradually taking root in Hong Kong.
Comprising the “Retailer Smart Payment Readiness Level” and the “Consumer Smart Payment Acceptance Level”, the Index aims to evaluate the popularity of smart payment in Hong Kong from the perspectives of both retailers and consumers. In this survey, telephone interview with 428 retailers and 1,049 Hong Kong residents aged between 15 and 64 were conducted between May and June 2018.
The “Retailer Smart Payment Readiness Level” was reported at 62.2. Amongst the four component sub-indices, “Retailers’ knowledge and perceptions towards the smart payment market” (73.3) sub-index is the highest. Amongst the surveyed types of retail outlets, the readiness level of “Jewellery, watches and clocks, and valuable gifts” (73.7) ranked the highest.
More than 90% of the surveyed retailers provide non-cash payment channels, with credit card (81%) being the most popular channel, followed by mobile payment (43%). They provide mobile payment mainly to “satisfy customers’ needs” (91%). Around 60% of surveyed retailers have not yet provided mobile payment mainly due to “estimated low demand from customers”.
On the other hand, the “Consumer Smart Payment Acceptance Level” reported a slightly-lower-than-expected reading of 45.5. Only the sub-indices for consumers’ “willingness to adopt smart payment” (56.0) and “knowledge and perceptions towards the smart payment market” (55.6) are above the 50-mark. In term of age group, citizens aged “25-34” were most receptive to the notion of smart payment (57.1), whereas the “50-64” age group (32.2) was least receptive.
About 30% of the surveyed members of the public had mobile payment experience while 14% plan to adopt mobile payment, with “quick transaction” (55%) the major reason for its usage. In contrast, the key hindrances to its wider use include “unfamiliarity with the operation” (68%) and “worries of personal data leakage” (55%). To boost mobile payment adoption in Hong Kong, most respondents felt “increasing the number of locations/shops that accept mobile payment” (64%) to be the most important.
Jennifer Tan, CEO of Alipay Payment Services(HK) Limited, said, “AlipayHK Smart Payment Popularity Index is Hong Kong’s first credible comprehensive investigation. The biggest takeaway is that our city is gradually becoming a Smart City. According to the study, over the past year, 20% of Hong Kong citizens ‘frequently’ or ‘sometimes’ purchased through mobile payment. Given current user base of 1.5 million citizens, we are glad our users are part of the main driving force in mobile payment. In addition, the 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.”
The survey also studied the payment ecosystem in Hong Kong in the past year. The results revealed that cash was still the most frequently used payment method (99%), while mobile payment only accounted for 20%.
Wilson Wong, General Manager (Information Technology) of HKPC, said, “The survey found that while members of the public in general are willing to pay by non-cash methods, most still prefer the traditional payment means. Their reluctance in embracing new payment methods might stem from unfamiliarity with their operation and fears of data leakage. On the other hand, the misinterpretation that customers has a low demand for new payment tools has deterred retailers from investment which in turn hinders Smart City development in Hong Kong. In fact, the entry barriers for some of the mobile payment models openly available are relatively low. Retailers may ride on this to provide their customers with an additional mean of payment, while building a firm digital foundation in preparation for e-commerce and m-commerce.”
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4 July 2018