19 October 2019
Alipay has partnered with CK Hutchison and some wet markets in promoting its e-payment service in Hong Kong. Photo:
Alipay has partnered with CK Hutchison and some wet markets in promoting its e-payment service in Hong Kong. Photo:

Octopus card or Alipay?

As some wet markets in Hong Kong prepare to accept Alipay for their daily transactions, there has been a heated debate in online forums as to which is a better choice for the merchants — Alipay or the city’s long-standing Octopus card payment system.

In discussing the merits of the two cashless payments systems, let’s us take a look at the technology standard used by Octopus card.

Already in use for two decades, Octopus card adopts Japan’s FeliCa radio frequency identification (RFID) chip technology, a type of NFC-F technology. Most smartphones do not support this technology and that is why unlike Alipay, Octopus could not be used for online e-payment.

Sensing the market potential, Octopus last year decided to give up its more stringently-regulated banking license to get a stored value facilities (SVF) license. The Hong Kong Monetary Authority (HKMA) has granted a total of 13 SVF licenses to 13 mobile e-wallet service providers.

After securing an SVF license, Octopus launched O! ePay, a network-based stored value and payment service that facilitates person-to-person payments and online transactions. There are more than 30 million Octopus cards in circulation, and some users have already switched to O!ePay.

I believe Octopus might launch person-to-merchant service when the number of O! ePay users reaches a certain scale. It is also likely to adopt QR Code or similar technology, which will enable users to complete online payment without the hassle of installing terminals.

Since quite a lot of merchants are using Octopus now, convincing them to shift to O! ePay shouldn’t be such a problem

Now, coming to Alipay, although it is well-established in mainland China, it is still relatively new to Hong Kong people. To cultivate the Hong Kong market, the firm has recently partnered with CK Hutchison (00001.HK) to promote the use of Alipay through the Hong Kong conglomerate’s large retail network.

Alipay has also teamed up with 12 wet markets to roll out its service.

Octopus may focus on finding new merchants for O! ePay, while Alipay may continue to seek more partners.

It’s hard to say which one is superior, but for users, competition is always good. In addition to competing on safety and convenience, whoever offers a better deal to users will win the business.

This article appeared in the Hong Kong Economic Journal on Oct 30

Translation by Julie Zhu

[Chinese version 中文版]

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Hong Kong Information Technology Federation honorary chairman