SEO Case Study: How I Increased SEO Traffic & Ranking by 50-60% in 6 Months
Digital payment in Germany & Hong Kong
1. Digital Payment
In Germany & Hong Kong
To Chun Yin, Toby 15201309
Cheung Yi Ching 17217482
Hui Ying, Olivia 17217687
Lam Hoi Yan 15213714
Ko Tsz Hin, Jayden 17217172
2. Contents
1. Current State
a. Cash Usage
b. Digital Payment
Usage
2. Comparison & Forecasts
a. Digital Ecosystem
b. Culture
c. Central Bank
2
3. Germany 80% of the transaction done in Cash
(Bloomberg, 2018)
Contribute 51% total transaction value
(Deutsche Bundesbank , 2017)
3
4. Hong Kong
40% is contributed by cash.
4
According to HKMA report,
60% of the private consumption done in
electronic payment (including Octopus card)
(HKMA, 2017)
5. 5
Germany
Debit Card: 25.5 % Total Value
Direct Debit: 13 %
Credit Card: 6 %
(Deutsche Bundesbank , 2017)
9. Digital Ecosystem
Business digital development are slow
a. Majority of businesses accept cash only
(Bloomberg, 2018).
a. Supermarket Chain & IKEA adopt credit card
since 2016 (Bloomberg, 2018).
a. NO large scale tech companies to drive digital
transformation (McKinsey & Co., 2017)
9
10. 10
Digital Ecosystem
A highly readied city
a. Octopus Card, was the most pioneering
contactless payment method, already widely
adopted (SCMP, 2017)
a. Large high tech firms enter HK market
(SCMP, 2017)
11. Culture
Strong cultural attitude towards
cash
1. symbolic meaning more
important than convenience.
(Bloomberg, 2018)
2. Association of German Banks:
Majority of TEENAGERS prefer
cash (Bankenverban, 2015)11
12. Culture
▪ Many ATM in Hong Kong
▪ Surcharge for credit card
transaction
▪ Privacy problem
▪ Red packets
12
Cash is still king in Hong Kong
13. Central Bank Policies Recently
13
1. Stopped €500 bill production and distribution
2. Proposed to limit physical transaction > €5000
(Guardian, 2016).
14. Deutsche Bank & other banks:
14
1. Start their banking, payment mobile app in 2017
(Deutsche Bundesbank , 2017)
2. Girocard allow users to make mobile payment
with
16. Government
16
1. “It was the government that has not been looking
forward. The government has always relied on the four
traditional pillars of economy only,”
(SCMP,2017)
17. 17
2. Lack a standard for different platforms to accept
multiple e-payment methods
3. Lack regulation on lowering the installation cost of
e-payment readers,
(SCMP,2017)
Government
18. Digital Ecosystem Banking SectorCulture
18
The Overall Trend
Slow vs Ready
Attitude vs Habit
Active vs Traditioned
20. Reference - Germany
Campbell, M. (2018, Feb 6). Germany is Still Obsessed with Cash. Bloomberg Market. Retrieved from:
https://www.bloomberg.com
Bankenverband. (2015, Oct 14). Auch junge Leute bevorzugen Bargeld. Bankenverband Newsroom. Retrieved from:
https://bankenverband.de
Deutsche Bundesbank. (2017). Cash and cards vs smartphone? - Outcomes of a comparative study on retail payment
behaviour in China and Germany. Retrieved from:
https://www.ecb.europa.eu/pub/conferences/shared/pdf/20171130_ECB_BdI_conference/payments_conference_
2017_academic_paper_korella.pdf
Accenture. (2013). Digital Payment Transformation. Retrieved from:
https://www.accenture.com/t20150707T195226__w__/us-en/_acnmedia/Accenture/Conversion-
Assets/DotCom/Documents/Global/PDF/Industries_5/Accenture-Digital-Payments-Transformation-From-
Transaction-Interaction.pdf
The Guardian. (2016, May 4). €500 'Bin Laden' banknotes to be axed. Retrieved from: https://www.theguardian.com
The Guardian. (2016, Feb 8). German plan to impose limit on cash transactions met with fierce resistance. Retrieved
from: https://www.theguardian.com
McKinsey & Company. (2017). Driving German Competitiveness in the Digital Future. Retrieved from McKinsey & Company
website: https://www.mckinsey.com/
CitiGroup. (2016), Releasing the Flow of Digital Money. Retrieved from:20
21. Reference - Hong Kong
Singh, H. (2017, Jan 5). Why Hong Kong going cashless is no small change. SCMP. Retrieved from: http://www.scmp.com/
Soo, Z. (2017, Oct 21). When will consumers in Hong Kong ditch their wallets for the mobile version? SCMP. Retrieved from:
http://www.scmp.com/
Chu, K. (2017, Nov 6). Hong Kong will embrace mobile payments – eventually. SCMP. Retrieved from: http://www.scmp.com/
Yeung, R. (2018, Jan 10). Bank to e-wallet instant fund transfers to launch this year in Hong Kong. SCMP. Retrieved from:
http://www.scmp.com/
Fortumo. (2016). Carrier billing in 2016: Asia. Retrieved from: https://fortumo.com/blog/carrier-billing-in-asia-2016-market-report-by-
fortumo/Carrier-billing-in-Asia-2016-market-report-by-Fortumo.pdf
LCQ19: Provision of bank branches. (n.d.). Retrieved March 15, 2018, from
http://www.info.gov.hk/gia/general/201611/23/P2016112300585.htm?fontSize=1
Hong Kong Monetary Authority Press Releases. (n.d.). Retrieved March 15, 2018, from http://www.hkma.gov.hk/eng/key-information/press-
releases/2017/20170929-3.shtml
Hong Kong slow to go cashless? Blame Octopus card, minister says. (2017, October 30). Retrieved March 15, 2018, from
http://www.scmp.com/news/hong-kong/economy/article/2117467/hong-kong-slow-go-cashless-blame-success-octopus-card
Hong Kong Monetary Authority - Howard Lee on One Year On since SVF Licences were First Granted. (n.d.). Retrieved March 15, 2018, from
http://www.hkma.gov.hk/eng/key-information/insight/20170824.shtml
Most Hongkongers think government lags in e-payment: Poll. (2017, August 13). Retrieved March 15, 2018, from
http://www.scmp.com/news/hong-kong/economy/article/2106650/most-hongkongers-think-government-lags-promoting-e-payment
21
Notas do Editor
In Germany, physical cash is still a key mean of transaction currently.
According to Bloomberg article, around 80% of the transaction done in Germany is Completed through cash. This 80% is amounted to nearly half of the total German transaction value.
According to the statistic provided by HKMA, electronic payment in Hong Kong contributed to about 60% of the total private consumption.
Although digital payment is rare in Germany. There are 3 major digital payment method. According to the statistic reported by Germany central bank. About ¼ of the transaction value is contributed by debit card. While direct debit accounted for 13% and credit card usage is quite low which only contribute about 6% of total transaction value.
The digital payment method in germany mainly consist of 3 types. Debit cards, Credit cards, and online direct debit.
https://fortumo.com/blog/carrier-billing-in-asia-2016-market-report-by-fortumo/Carrier-billing-in-Asia-2016-market-report-by-Fortumo.pdf (page 26/30)
To make a comparison and forecast between Germany and Hong Kong.
The digital transformation from Accenture in 2013, and digital payment report from CitiGroup in 2016 provide us with 3 major factors that will influence the development of digital payement. We will based on the digital ecosystem, the culture and the banking sector in respective countries to make a comparison.
In Germany, the digital ecosystem currently is not beneficial for the development of digital payment.
Since multiple evidences shows that the business sector is mostly technologically old fashioned and not digitized.
According to a 2018 Bloomberg economic articles on Germany digital development, it highlights that most of the business in Germany is still accept cash as the mere means of payment. This kind of practices is very common in both large or rural cities. For example, large supermarket chains and IKEA in German, just adopt credit card as a payment method 2 years ago.
We can see that Germany is quite lag behind in terms of adopting new digital payment method and also creating a very unhealthy environment since it doesn’t let customers to choose between paying digitally or not.
McKinsey report on Germany digital development also criticizes that the slow digital development is mainly caused by the business focuses on engineering industries instead of digital technology. The reports argues that Germany is currently lack of large scale consumer tech company in the local market. Without large tech companies, most of the digital payment method is developed by start-ups and fails to penetrate into the mass market effectively.
While in Hong Kong, it tells a very different picture. Hong Kong actually is a city have ready for digital payment long before most countries in the world.
And it is also a technologically advanced city with lots of infrastructure and supports.
Most typically is the Octopus card in Hong Kong. Accordign to SCMP articles, Octopuas card is actually one of the most pioneering and most advance cashless payment technology globally when it first launched.
And it became a widely accepted key means of payment already over the last decade. Most business already owned a Octopus card readers, and mostly every hong kong citizen owned one already.
Other than well-established contactless payment method, Hong Kong is quite different from Germany. Since many Mainland large scale tech companies like Tencent, Alipay launch their e-wallet in Hong Kong recently.
These large tech companies have more resources and penetrate into Hong Kong market to enocurage more users.
Cash Culture also affect the development of digital payment in Germany quite a lot.
Bloomberg economic article in 2018 argues that the convenience bring by digital payment is not the major concern of most German people. Cash to German have a much stronger cultural and historical meaning, such as their own privacy, their autonomy and their trust towards their government and states. These social and cultural attitude create quite a strong resisting forces towards using digital payment methods.
In fact, this cultural attitude still remain strong in young German as well. As a research conducted by the Association of German Banks demonstrates that 67% of the German teenagers still prefer to use cash as payment method than other using cards payment. Younger segment of users, are considered to be a key group to adopt digital payment method in many countries. With a majority of teenagers prefer cash to compete transaction, it makes Germany become much harder to develop digital payment in a culture perspective.
According to the research from Paypal, 45% of respondents don’t use the digital payment because of the privacy problem.
According to the press release from the government in 2015, there are 3249 ATM in Hong Kong. Also, people can also make a withdrawal in different convenience store by using EPS.
Some computer stores add a three percent surcharge for credit card transactions, meaning cash is the preferred payment method for many customers.
In addition, th
(According to the press release from the government in 2015, there are 3,249 ATM in Hong Kong. In the meantime, people can withdrawal cash in the convenience stores by EPS easily. These show that cash is dominated in Hong Kong.
In addition, some computer stores add a three percent surcharge for credit card transactions. Also, according to the research from PayPal, 45% of respondents do not use the digital payment because of the privacy problem. These implies that cash is the preferred payment method for many customers.
On the other hand, due to the customs, cash is also widely used in the red packets.)
In Germany, certain efforts are made to encourage digital payment usage. According to the Guardian articles, the German central bank has proposed to stop the production of its largest amount euro bills. And it’s also proposed to ban cash transaction which is more than 5000 Euro dollars.
Since, many of the German business nowadays welcome the use of 500Euro Dollars bill to make small or large amount transaction, especially on paying for their rent. These kind of policies can positively encourage German to compete their large amount transaction through digital method and slowly help German to make digital transition on making payment.
To support the development of digital payment and encourage more digital payment users in Germany, banks also put a lots of effort.
According to the report from German central bank, Deutsche Bank launched their mobile app in 2017. This app allows users to link their bank account with with their mobile phone and make contactless payment.
The report also cover the mobile payment development of Girocard. Girocard is a card that link across all German banks and ATM. and recently the Girocard develop into a mobile version which allow users to make mobile payment with just a single united bank account.
This kind of efforts devoted by the banking sector is making payment more convenient, as well as making it more acceptable for the German. Since most the German trust the banks more than private companies.
To support the development of digital payment in Hong Kong, HKMA started to put efforts in it.
According to the press release from HKMA, it a started a number of plans that prepare Hong Kong to move into a New Era of Smart Banking
Faster payment system(FPS)
Open Application Programming Interface (API)
collaborate with several authorities in other jurisdictions in the development of Fintech:Distributed Ledger Technology (DLT) platform
http://www.hkma.gov.hk/eng/key-information/press-releases/2017/20170929-3.shtml
Those four pillar sare trading and logistics, financial services, professional services and tourism.
http://www.scmp.com/news/hong-kong/economy/article/2117467/hong-kong-slow-go-cashless-blame-success-octopus-card
3. Cannot ensure small and medium-sized businesses can benefit from e-payment
http://www.scmp.com/news/hong-kong/economy/article/2106650/most-hongkongers-think-government-lags-promoting-e-payment
To forecast the trend of digital payment between Germany and Hong Kong. We will make a simple summaries about the comparison we made.
Firstly, by considering the digital ecosystem between the 2 places. Germany is currently developing their digital potential slowly. Since most of the German business is still based on physical transaction alot and most business are lag behind from digitalization.
While Hong Kong, on the other hand, the ecosystem is actually digitally ready to adopt to the next level of digital payment, the only bottleneck lies in whether business willing to jump further ahead or not.
Secondly, German’s strong cash culture is creating a resisting attitude towards digital payment. Such attitude is strong since its inherited from their social history and its also affecting the younger generation.
However, compare to Hong Konger. Hong Kong people don’t have a strong cultural resistance towards cash or digital payment. Their preference mostly rely on established habits and convenience, which we believe is more easy to influence through different business strategies than German culture.
Lastly, German Banking sector is playing a very active approach in order to encourage users to use digital method more frequent. They proactively take advantage of German trust towards banks to promote and encourage digital payment. Although Hong Kong banking sector also encourage the use of digital payment. Still, Hong Kong banking sector and related policies are more traditioned. Hong kong focus more on the traditional industry and did little to encourage businesses and citizens to use digital payment.
In conclusion, we believe that both countries will both have a positive growth in digital payment development in the next 5 years. Hong Kong may enjoy a faster growth by comparison to Germany.
