Hong Kong needs a mindset shift for digital payments, experts say

A panel of experts on Thursday played down the notion that mainland China is much more advanced than Hong Kong in terms of the technology of mobile payments, saying it was more of a perception issue among consumers.

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“It’s more likely a change of mindset that is needed in Hong Kong [when looking at mobile payments adoption], how do people see digital and e-payments compared to cash,” said Effie Xin, managing partner of Asia-Pacific fintech and innovation financial services at EY in a “Redefining Hong Kong” panel discussion organized by the South China Morning Post.

“I would not say that mainland China is more advanced than Hong Kong [in this area].”

On average, a Hong Kong person uses a digital wallet two or three times a week, but only one-third of Hongkongers are classified as heavy users at four to six times a week, according to statistics from a 2019 Tofugear Digital Payments Landscape Report. The number of mobile payment users in China reached 659 million in 2018, and about 44% of them carry out more than 75% of their monthly expenditure via mobile payments, according to iiMedia Research.

Only 4% of overall retail spending in Hong Kong is conducted online, compared with 24% on the mainland, which is the highest of any nation, according to the FIS 2019 Retail Global Payments Report.

Octopus, which was launched in 1997 in Hong Kong, was used by 99% of Hongkongers aged between 15 and 64, with 36 million cards in circulation as of 2019, according to the same report by Tofugear.

It started with transport, then migrated to retail, according to Octopus Holding CEO Sunny Cheung, who was a panellist at Thursday’s discussion.

Meanwhile, in China’s hi-tech hub of Shenzhen, mobile payments services provided by Alipay, an affiliate of Alibaba Group Holding, and WeChat Pay, owned by Tencent Holdings, have made it difficult to pay or order in restaurants and shops if you do not have a mobile phone.

“E-payments providers like Alipay and WeChat Pay created the ecosystem [in China],” said Xin. “They have tried to cover many aspects of daily life.”

Consumer acceptance and trust is important if you want new payment methods to be adopted more widely, said Cheung. “If you want to start something new, you need to find what we call the killer application, otherwise, it won’t fly.”

There are concerns around privacy related to leaving payment traces behind in Hong Kong, added Cheung.

“We consider that personal data is always the customer’s data. It’s not ours,” said panelist Marc Zielinski, CEO at sporting goods retailer Decathlon Hong Kong. “We don’t store any [personal] data.”

Decathlon is implementing a self-checkout solution in some stores in Hong Kong, which enables customers to simply scan and pay for items using their smartphone.