Date
13 December 2017
Hong Kong's e-payment operators can learn from rivals, such as Tencent, whose WeChat Red Packet has become hugely popular. Photo: WeChat
Hong Kong's e-payment operators can learn from rivals, such as Tencent, whose WeChat Red Packet has become hugely popular. Photo: WeChat

HK should cultivate e-payment market for small amounts

Hong Kong has been criticized for lagging behind in fintech, in particular mobile payment. In fact, Hong Kong’s cashless payment giant Octopus was once a pioneer in e-payment using near-field communication (NFC) technology two decades ago, attracting numerous foreign governments and corporates to learn from its experience.

Nonetheless, the company became too complacent after the success and has failed to achieve new breakthroughs since then.

Also, the Hong Kong government and financial institutions have been rather conservative in developing electronic payment. As they tend to avoid risks and protect vested interests, the city’s e-payment development lags far behind its rivals.

Falling behind is not a big issue, the most important thing is to learn from the frontrunners and catch up with them.

For instance, there are more than 800 million users of WeChat Pay, and one of the most-used function is the Red Packet, a digital version of traditional envelopes stuffed with cash.

Users can send red packets to their friends and relatives during festivals. Bosses can reward their workers with red packet or even colleagues send each other red packets. The popularity of the red packet function gives WeChat a strong leverage and helps catapult it into one of the world’s leading e-payment tools. We should not underestimate these small transactions.

In the case of Hong Kong, e-payment started from paying fares and expanded to small payment to merchants. There are still lots of room for the application to expand in terms of small transactions.

It can be used to split meal bills among friends or buying grocery or paying taxi, among others. Small-amount e-cheque and cash transfer are also potential areas.

The Hong Kong Monetary Authority has approved five stored value facilities (SVF) licenses to Alipay, WeChat Pay, O! ePay, Tap & Go and TNG Wallet.

While the penetration rate remains low, it seems some of the operators have already found a niche, TNG is one of those.

About 350,000 domestic helpers working in Hong Kong are now using TNG wallet to remit their salary back home.

This article appeared in the Hong Kong Economic Journal on Dec. 1

Translation by Julie Zhu

[Chinese version 中文版]

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RT/RA

Hong Kong Information Technology Federation Chairman

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