The entry of new e-payment tools in Hong Kong in recent years has brought challenges to conventional non-cash payment service providers, and local authorities have strengthened efforts to regulate the sector to facilitate adoption of mobile payments, a spokesperson for the Hong Kong Monetary Authority (HKMA) noted.[Special coverage]
The spokesperson, who asked for anonymity, told the Global Times Wednesday that non-cash payments have long been adopted in Hong Kong, such as credit cards, debit cards and prepaid cards, most notably Octopus cards, which are widely accepted at most retail outlets, online merchants and public transportation services.
However, with the growth of technology and increased popularity of smartphones, new mobile payment tools are challenging "the market dominance of conventional non-cash payment service providers," the spokesperson said.
In view of the rapid developments in the local retail payment market, the HKMA implemented a licensing and regulatory regime for multipurpose stored value facilities (SVF) under the Payment Systems and Stored Value Facilities Ordnance in 2015 to provide a robust legal and regulatory framework to manage the risks that may arise from SVF, said the spokesperson.
There are currently 13 SVF licensees and 3 licensed banks operating in the HK SVF market, according to the HKMA.
As part of their efforts in enhancing services in Hong Kong, some licensees replicated their successful mainland or overseas experiences by introducing new products such as online payments and QR code payments to the local market, the spokesperson said, noting that other licensees targeted special market segments and offered niche products such as school fee payments and overseas remittance via mobile apps. Other new value propositions such as peer-to-peer payments, payment management, and value added services such as discount and coupon offerings are also being offered, according to the HKMA.
The spokesperson said that the SVF regime also provides a level playing field for all players, including local, Chinese mainland and overseas, to enter the Hong Kong retail payment market.
On September 1, 2016, the HKMA released and granted the first batch of SVF licenses for five stored-value service providers, including mainland's Alipay and WeChat Wallet, media reports said.