Hong Kong is edging closer to becoming a cashless society. To date, a total of 13 companies had already been awarded Stored Value Facilities (SVF) licenses in addition to 2 licensed banks that are regarded as SVF licensees.
What does this mean for Hong Kong consumers? More choices! The issuance of these SVF licenses is expected to usher greater adoption of mobile payments as choices abound.
But can a city of seven million accommodate so many payment options? Can Hong Kong sustain what may well be a very competitive marketplace in 2017?
A recent survey by Joint Electronic Teller Services Limited (‘JETCO’) reveals that consumers welcome the availability of such services. Among the 502 respondents to the survey, 76% had used the mobile payment services in Hong Kong, suggesting that the local mobile payment market could soon enter a period of high growth.
Other data points of the survey include:
- 43% of respondents have used peer-to-peer (P2P) transfer service with most indicating continued use of P2P service in 2017.
- 30% of those surveyed said they use P2P transfer service at least once a week
- 29% of those who never used P2P transfer service indicate willingness to try it in 2017
- 56% of respondents want mobile payment to be bundled with credit card or bank accounts
About 70% of respondents say they use mobile payment to settle bills. There is also preference among P2P users to have multiple payment options, including the ability to link credit cards, bank accounts and for topping up private-label stored value cards.
The survey also revealed that 70% of respondents admit to preferring to use a P2P payment service that is offered by banks (as opposed to non-banks) suggesting a higher degree of confidence among Hong Kong consumers in the banking industry.
According to JETCO’s CEO Angus Choi, the survey reflects growing acceptance of the convenience and security offered by mobile payment services. While convenience was cited as one of the main reasons for using the service, security was the biggest hurdle among those who have refrained from using P2P payment.
Although real time payment is now possible with JETCO, widespread adoption of P2P payment transfer remains elusive in Hong Kong. There is a lack of interoperability among the different players in the market, including banks.
“For people to enjoy a truly convenient and barrier-free P2P services, there needs to be one interoperable P2P platform,” he commented.
He believed that to succeed in the mobile payment market, one must be able to bridge the confidence gap between finance and technology.
JETCO which launched its JETCO Pay P2P service in April 2016 has four banks, China CITIC International Bank, Shanghai Commercial Bank, Wing Lung Bank and Dah Sing Bank, among its 36 member banks using the new P2P payment service. Choi confirmed two more will join the service in January 2017.
While he confirmed that registration to the service is rising, he also noted that other banks were taking a wait and see approach. At the moment there are too many mobile payment options in the market and banks are uncertain which options customers will prefer, and more important, which the payment strategy that bank itself will take.