22 April 2019
Digital payments have been positive for consumers, but there are a number of challenges for merchants as they try to manage the different channels. Photo: Reuters
Digital payments have been positive for consumers, but there are a number of challenges for merchants as they try to manage the different channels. Photo: Reuters

Challenges and opportunities in digital payments

As digital payments turn popular among Hong Kong consumers and more payment options are becoming available, EJ Insight invited David Lau, General Manager, Wirecard Hong Kong, Macau & Taiwan, to share his views on the opportunities, challenges and trends in this arena.

Excerpts from a conversation:

Q: With a wide range of digital payment options from numerous players, is the Hong Kong market already too crowded? What sort of opportunities does Wirecard see in Hong Kong?

A: Contrary to popular belief, the Hong Kong market is not that crowded yet. Despite the overwhelming reliance on the Octopus card, the bigger issue of digital payments has always been that the majority of digital payment systems and infrastructure are not robust enough, as of yet. That means that the immediate clearing of transactions and real-time interbank fund transfers have not developed as quickly as they have in other markets. This has hindered the growth of digital payments which is accelerating across the region.

Therefore, there remains a tremendous opportunity to evolve the way payments are done within Hong Kong. The launch of the Faster Payment Systems (FPS) is expected to advance the shift towards digital payments. But with this evolution, comes an anxiety in terms of how to deal with the various payment systems and platforms. This is a key area that Wirecard is looking into and can help overcome.

Q: Is it a headache for merchants to accommodate so many different types of digital payment methods?

A: The last few years have seen an influx of digital payment options to Hong Kong. While this has been very positive for consumers, there are a number of challenges for merchants as they try to manage the different channels. This is where we come in. Wirecard is partnering with businesses of all sizes to create universal platforms through our technology solutions. It offers a payment system that consolidates the various payment methods in one device for the retailer. It simplifies the process for the vendor and brings down the price for payment method providers because they can be incorporated into a Wirecard system with no need to roll out their own hardware.

Q: How are new technologies, for example wearables, VR, AI, etc, transforming user experience?

A: Payment methods are being transformed with the arrival of new technologies. The Gartner market research institute expects the wearable computing market to increase to 90 million devices by 2016. The benefit of wearable payments for consumers is undoubtedly the ease and the speed with which one can pay, with no need for a bulky wallet or physical cash. A simple hand movement is all that is necessary to make a payment, particularly for smaller amounts. Furthermore, users have real-time access to their transactions. Additionally, mobile payment methods also encourage impulse buying and speed up transactions. Loyalty and couponing functions increase customer retention.

Another emerging payment technology is the use of biometrics. In 2016, a study by Visa showed that consumers across Europe are ready to use biometrics when making a payment: Over two-thirds (68 percent) of Europeans are willing to use biometrics as a method of payment authentication, and half of Europeans (51 percent) stated that biometric authentication for payments could create a faster and easier payment experience than traditional methods. Out of different options for biometric identification, including, iris scans, voice or face recognition, 81 percent of consumers prefer fingerprints for its ease of use and security. Once again, this new payment method is quick, easy and secure, providing the consumer with both a satisfying experience and peace of mind.

Q: You mentioned biometrics as a safer way to protect consumers, is it already being implemented somewhere?

A: Yes, biometrics are a big trend in the payments industry in APAC. In the near future, biometrics, ranging from fingerprint, face, iris and voice recognition, could overtake the use of cards as a payment device especially in retail shopping. Goode Intelligence predicts that 2.6 billion people will be using biometric payments by 2023. Most recently, Alipay trialed facial recognition payments at KFC in China, and Wirecard launched its Internet of Things (IoT) shelf which also uses biometric facial recognition

Q: What else does Wirecard offer merchants to help them do business?

A: Wirecard has a range of services for its users including payment acceptance, payment issuance, financial services and software and licensing. In addition, it provides a number of value-added services that help merchants do business. These include real-time analytics and business intelligence platform couponing, loyalty and advertising solutions, AI-powered anti-fraud services, International call center and managed services and terminal operations.

Q: Given the growing acceptance of digital payments, is this industry going to offer lots of job opportunities?

A: Yes, I am sure it will. With new SVF and FPS initiatives by the HKMA as well as other cross border wallets, this is definitely the most exciting era in the payment industry.

Q: Please tell us something about yourself and your professional background. How did you come to join Wirecard?

A: I have been the Hong Kong General Manager at Wirecard since June 2016. Previously, I was the regional sales director at Oberthur Technologies where I was responsible for Hong Kong and Taiwan P&L including sales, customer service, technical support as well as the operation in Shenzhen service center.

I’ve also held senior business development roles with Global Payments, Octopus Cards Ltd and Visa. “Making everyday life easier” is the slogan of Octopus. It truly reflects what we should do as part of the payment industry – that we should bring convenience and ease of mind to the payers and also to the payees.

Q: Anything else you want to share with our readers?

A: I would encourage readers to embrace digital payments and not be afraid to use them. After all, we’re all just trying to save more time and leave the hassle behind – and this definitely helps make our buying journey much easier.

– Contact us at [email protected]


EJ Insight writer

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