China’s mobile payment giants Alipay and WeChat Pay are stepping up their efforts to break the Octopus Card’s longtime dominance of the electronics payments market in Hong Kong.
But Octopus Cards Limited itself is setting its sights on the enormous online shopping payments market.
In an interview with the Hong Kong Economic Journal, Octopus Cards chief executive Sunny Cheung Yiu-tong said the company, while expanding its coverage of local retail outlets, is seeking collaboration with international payments service providers to enable the use of its contactless smart card system as a mode of payment in e-commerce transactions around the world.
“There are so many [e-commerce platform] websites around the world, we can’t approach them one by one on our own,” Cheung said.
That’s why Octopus Cards plans to work with international payments service providers so that its payments solutions would become a payments option for e-commerce websites as well.
Cheung hopes the initiative will be accomplished within the year.
He believes the online shopping payments will generate huge revenues for Octopus if the company can take even just a tiny fraction of the global market.
Contactless payment is a fiercely contested market in the city, with emerging players spending heavily on marketing and discounts to capture market share.
Cheung admits that competition is bound to get tougher, but the company maintains its focus on the customers. It continues to think of ways to be of better service to card users such as allowing them to use the system as a payment option via smartphones.
Octopus payments solutions target the micro-payment market with high frequency, he said. One of the company’s advantages is its extensive network of more than 20,000 retail outlets that accept Octopus payments, and the company continues to expand the network.
There are about 35 million Octopus cards currently circulating in the market, and the company issues about 8 million new cards annually. Cheung said there is no sign of a decline in the numbers.
With new technologies driving the evolution of contactless payment services, such as QR codes and near-field communication (NFC), Cheung said it is difficult for him to predict if the number of physical Octopus cards circulating in the market will decrease, but he believes the system will not disappear in three years.
The Octopus payments service has been recording healthy growth. The transaction amount of Octopus retail payments grew by 12.4 percent last year, compared with a 2.7 percent growth in Hong Kong’s overall retail sales.
Despite the fierce competition in the market, Cheung expects a double-digit growth this year.
This article appeared in the Hong Kong Economic Journal on June 11
Translation by Ben Ng with additional reporting
[Chinese version 中文版]
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