The Hong Kong Productivity Council last week released the inaugural AlipayHK Smart Payment Popularity Index, which shows that electronic payment solutions are not yet widely accepted in the city.
Though merchants are very optimistic, local residents are being held back from using smart payment tools due to “unfamiliarity with the operation” and “worries of personal data leakage”, according to the study.
Hong Kong is widely seen as lagging behind other cities in the region, but in fact, there is real progress being made in recent years.
In 2016, the Hong Kong Monetary Authority (HKMA) issued the first batch of Stored Value Facility licenses. There are now 16 licensees in the city, three of which are licensed banks which intend to develop the payment tool.
The electronic payment market in the city is becoming very competitive. But there are common issues regarding current electronic payment tools. For example, one has to wait for two days to top up their account unless they are using an affiliated bank.
Here’s one scenario: A shopper wants to participate in a supermarket’s promotion that offers a HK$100 rebate if one spends over HK$500 using an e-wallet. However, the shopper’s e-wallet does not have enough money at the moment.
Even if she chooses to top up her balance, it would take up to two days for the amount to be transferred. So after two days, would the shopper still have the drive to make the purchase?
That’s why the HKMA launched a Faster Payment System (FPS) in September, which allows for money to be transferred to the e-wallet on the same day. Such a system would encourage more shoppers to use a mobile payment platform.
On the other hand, security concerns, which many respondents raised in the study, mostly stem from a misunderstanding or ignorance of how the payment tools work.
Most mobile payment apps require biometric authentication or password. Also, most of these programs use a one-off token for processing of transactions, thereby ensuring the security of each transaction.
By contrast, if a traditional credit card is lost or stolen, it’s much more vulnerable to fraud. A friend of mine lost his wallet during lunch break, and someone else was able to use his credit card in just 30 minutes.
So which payment method do you think is safer?
The full article appeared in the Hong Kong Economic Journal on July 12
Translation by Julie Zhu
[Chinese version 中文版]
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