PayPal mobile device hassmall traders in its sights
PayPal, the US e-commerce payment platform, is to tap a local market that has been largely neglected by electronic payment channels but is worth up to HK$2.8 billion a year.
It will enable people such as taxi drivers, wedding photographers and masseurs on call to accept credit cards without having to pay high annual fees, and give customers one more option to settle small transactions.
With a smartphone app PayPal launched in Hong Kong yesterday and its plug-in device, merchandisers without their own shops can accept credit cards anywhere. Customers can use their cards even when buying from a hawker.
Kerry Wong, managing director of PayPal for Hong Kong, Korea and Taiwan, said: 'We don't charge monthly fees, we don't have a set-up cost. All you need is to register our app and within five days we will send you the card-reading device. All you have to pay is 3.9 per cent of your transaction value.'
Credit card companies and EPS charge small and medium-sized enterprises (SMEs) annual fees of HK$3,000 on top of commission of between 3 and 5 per cent. They also they have to satisfy certain conditions to be eligible for application, which is why small shops prefer not to accept cards for small sales.
PayPal will provide 10,000 free mobile card-reading devices to two local SME groups for their members to sample. Eventually the company will charge for the reader, but the company said they would be very cheap.
The new service is targeted at the niche market of one-man entrepreneurs or online merchandisers without shops, which according to a PayPal survey was worth HK$2.8 billion last year.
'With local SMEs moving from an export-driven market to one relying on tourism, our service could be a big help, as tourists do not usually carry a lot of cash; they use cards,' Wong said.
With Asia accounting for 50 per cent of PayPal's growth last year, Wong hopes Hong Kong - with its high penetration rate of smartphones and adaptability to innovative ideas - could be a test bed for the service and set an example for the likes of South Korea, mainland China and Taiwan, where the service will be launched later.
About 300,000 companies globally have already made reservations for the device.