17 February 2019
BOC Credit Card's Dickson So (left) and Mary Lo say the company needs more time to test QR code security.
BOC Credit Card's Dickson So (left) and Mary Lo say the company needs more time to test QR code security.

BOCHK roadtests QR code security for mobile payments

BOC Credit Card (International) Ltd. is still hammering out security issues with ​mobile quick response (​QR​)​ code payments ​to safeguard customer details but QR code electronic coupons could be up and running by the end of the year, according to top management.

General manager Dickson So said security was not an issue with the traditional model in which the near-field technology goes through point-of-sale terminals.

“But when it comes to QR codes which use open networks like WiFi or the mobile network, we need to make sure it is secure,” So said.

“This is why the People’s Bank of China earlier stopped QR code payments on the mainland. QR codes jumped over the traditional rules governing data security, closed-end transmission and card readers. The central bank was concerned because it didn’t have any protection on those areas.”

The 21st Century Business Herald reported in mid-March that the People’s Bank of China (PBoC) had suspended the use of virtual credit cards and QR code payments provided by China CITIC Bank Corporation Ltd. (00998.HK), Alibaba Group’s Alipay and Tencent Holdings (00700.HK)’s Tenpay.

The central bank said it made the move because it needed more time to check the processes and to make sure that the customers’ information is ring-fenced, the report said, citing a PBoC document. At the same time, QR code payments, which enable online-to-offline transactions, enable inter-provincial transactions that regulators might struggle to monitor, it said.

BOC Credit Card’s So said that company could step up development of virtual credit card technology but it is too early to say when because the systems are still being tested.

“We expect to launch QR code electronic coupons by the year end. We are still waiting for approval from the Hong Kong Monetary Authority,” he said.

SIM-card based

Before then, BOC Credit Card plans to launch its SIM-card-based technology by year-end; its SD card-based Pay Pass system lifted off in November and Quick Pass was up and running in March.

​​Quick Pass is ​a ​microSD​-card​-based​ payment service which is ​more focus on cross-border spending of up to ​HK$​1,000​ (US$128.53)​ ​or 1,000 yuan​ (US$159.75)​ per transaction. Pay Pass lets users make payments in Hong Kong and overseas.

BOC Credit Card deputy general manager Mary Lo said consumers mostly use these systems in coffee shops and supermarkets, spending HK$150 on average on each transaction.

There are about 2.5 million Quick Pass point-of-sale terminals on the mainland, mostly in supermarkets, coffee shops, transport systems and convenience stores.

In Hong Kong, BOC Credit Card aims to 1,000 Pay Pass terminals available for Quick Pass.

Waning spending appetite

General manager So hopes spending on BOC cards to expand at double-digit pace but expects spending for the market as a whole to grow by only single digits this year.

“Actually, retail spending overall is not as active as before​, because the property and stock markets, which are the biggest sources of extra income, did not grow much. But if the economic environment doesn’t improve much, we expect growth in spending credit to ease this year,” he said.

The firm posted about 8 percent growth rate in spending credit for the first quarter​, up from 6.7 percent a year earlier. There were 3 million cards issued in the period, up 3.68 percent from a year earlier. It issued more than 1 million cards with China UnionPay, 7.34 percent more than for the same time last year.

– Contact the reporter at [email protected]


Ayishah Ma is a financial reporter on Greater China issues.

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