Banks in Hong Kong foresee limited impact from Apple Pay

October 29, 2015 15:35
Apple Pay is on its way to Hong Kong in the new year, but banks say they aren't worried. Photo: Bloomberg

Apple Pay, Apple Inc.’s mobile payment system, is set to land in Hong Kong next year, but executives at local banks don't expect it to have much of an impact, Apple Daily reported Thursday.

When Apple reported its fiscal fourth-quarter earnings Tuesday, chief executive Tim Cook announced a partnership with American Express to take the mobile payment service to Australia and Canada this year and to Spain, Singapore and Hong Kong next year.

An unnamed manager in charge of the credit card business at a bank in Hong Kong was quoted by the newspaper as sayingthe impact from Apple Pay should be limited, as there are now various payment methods in the market and none of them has secured a dominant position.

The manager listed three hurdles Apple Pay, which was launched in the United States last year and in Britain this year, will bump into in Hong Kong.

First, there aren't many iPhones in the city equipped with the near field communication (NFC) technology Apple Pay requires.

Second, the fact that almost every American Express cardholder must meet the service's income criteria and pay an annual fee will affect the desire of consumers to adopt it.

Third, American Express is only in fourth place in terms of market share in Hong Kong and doesn't have too many partner stores, as the card issuer charges higher processing fees than market leaders Visa and MasterCard.

However, a senior executive in Shanghai Commercial Bank was quoted as saying the penetration rate of the iPhone in Hong Kong is high and mobile payments are a trend that can't be stopped.

Only the iPhone6, iPhone6s and Apple Watch are compatible with Apple Pay. Users of older iPhone models need to have Apple Watch to use the service.

Apple did not say whether Apple Pay will also be usable on the platforms of Visa, MasterCard and China UnionPay in Hong Kong.

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