Octopus Holdings, which runs the widely-used smart card-based cashless payments system in Hong Kong, has launched a QR code service to encourage the acceptance of mobile payments by small merchants and taxi drivers.
The new payment method requires only a smartphone on each side of the transaction, making for smooth and easy cash transfers, Apple Daily reports.
Merchants won’t need to spend money on installing Octopus card readers, unlike the case with the company’s long-established payments system.
Existing users of O! ePay, Octopus’ online payment service for personal use, can now pay for food and other items by scanning the QR code with their phones and make the payment through the Octopus app.
A key target client group for the new service will, however, be the city’s 40,000 taxi drivers, who currently deal mostly in cash, according to Octopus CEO Sunny Cheung Yiu-tong.
Octopus, Hong Kong’s first cashless payment operator, has dominated the market since its launch two decades ago of its stored value smart cards, which utilize near-field communication technology.
The company has now embraced the new QR code feature as it seeks to ward off competition from mainland Chinese online payment platforms such as Alipay and WeChat Pay which are expanding rapidly in Hong Kong.
Adrian Tam, a sales and marketing general manager at Octopus, pointed out that traditional Octopus cards were fast, with transactions completed within 0.3 seconds.
They were also reliable as they did not require an internet connection.
Regarding the new QR code service, the biggest draw would be the simple set-up procedures, CEO Cheung said.
“Merchants can sign up at virtually no cost; all they need is their mobile phone,” he said.
Businesses can save “thousands of dollars” if they opt for the new service, compared to installing an Octopus card reader in shops, the company said.
To get enrolled as a merchant, an entity must have a valid business registration. As for individuals, they need to be taxi drivers or licensed hawkers.
The authentication process may take up to three days. Once the registration process is completed, a designated QR code for the business will be available, and users can start receiving money from the more than one million individual users of the Octopus app and O! ePay, according to the company.
Businesses that sign up before March will have their bank account transfer fees waived for the first twelve months. After that one-year period, a levy of 1.5 percent will apply to all transactions.
The new ‘Octopus for Business’ app went online for both Android and Apple devices on Thursday.
Cheung said it is hard to predict how many would join the service, which represents one more choice for Hongkongers.
Hong Kong’s mobile payment market was opened up last year when authorities began issuing licenses to operate such services, paving way for entry of firms such as Tencent’s WeChat Pay and Alibaba’s Alipay.
WeChat Pay has announced that customers will be able to use their mobile phones to make payments for MTR tickets.
Cheung dismissed the competition, pointing out that Octopus works closely with MTR and that 90 percent of the ticket transactions at MTR stations are made via Octopus cards.
“We continue to roll out new features for Octopus cards, and we are going to announce a new service with our partner Samsung pay next month,” Cheung told HK01.com.
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