Mobile payments

Hong Kong’s Octopus set to launch e-wallet app for Apple devices

Users will need to buy a Bluetooth card reader to pair their Octopus card to their iPhone, Apple Watch or iPad when the system, a rival to newly introduced Apple Pay, goes live in the city on Wednesday

PUBLISHED : Tuesday, 26 July, 2016, 5:44pm
UPDATED : Tuesday, 26 July, 2016, 10:33pm

The e-wallet battle is heating up, after Hong Kong’s dominant ­Octopus cards announced on Tuesday an app for Apple devices to be launched on Wednesday, a week after ­Apple Pay went live in the city.

To use the system, Hongkongers will need to download an ­Octopus app, buy an Octopus card reader for HK$228 and pair the card reader via Bluetooth with an iPhone, Apple Watch or iPad.

Apple tightly guards its security and proprietary technology used for its digital wallet and mobile payment service, Apple Pay.

That service uses Apple’s TouchID fingerprint recognition technology to make payments, which Octopus does not support.

Apple Pay rolls out in Hong Kong with experts predicting ripe future for advanced mobile payment services

That is why Octopus needs to include the personal card reader to support its own mobile ­payment set-up.

China’s similar Alipay and Tencent’s WeChat app support TouchID, making them convenient for iPhone users.

Octopus’ online payment ­services have been available since 2014 on Android smartphones and have so far recorded about one million downloads.

Last week Apple Pay, which uses so-called near-field communications technology built into ­iPhones, iPads and Apple Watches to make contactless payments in about 10,000 stores around the city, allows users to buy anything from a cup of coffee to tens of thousands dollars of haute ­couture at Lane Crawford in a ­second or two.

At Oliver’s, a delicatessen shop in Central, banker Gary Allen paid for a snack and small drink with Apple Pay by placing his iPhone near a point-of-sale terminal.

“It’s a good record of payment, and convenient to use when going to the gym, because I don’t want to carry any cards with me,” he said. He said he usually used ­Apple Pay for shopping to earn Air Miles on his credit card, but used Octopus for public transport.

Roy Shek, a banker in his twenties, said he did not think Apple Pay any safer or more convenient than Octopus when shopping for toiletries at a Manning’s health and beauty store. “I’m just trying it out for the newness factor, and to take advantage of the promotions,” he said.

Apple Pay in Hong Kong: everything you need to know

Octopus chief executive ­Sunny Cheung Yiu-tong told the Post that the new online feature could transfer funds from one user to another through person-to-person app O! ePay, and settle payments to online shops such as Alibaba’s Taobao.

The app does not support ­contactless payments in stores using an Apple device.

“Competition exists at all times,” Cheung said. “Octopus ­offers a very simple, efficient and convenient choice.”

He added that Octopus was not only used for shopping at 17,000 retail outlets, but on public transport and for accessing ­residential and commercial premises. Apple Pay is available at about 10,000 outlets.

“By using Octopus cards, a bus or train fare, for example, is settled in less than half a second because of its off-line nature, which is among the world’s fastest,” Cheung said. “Speed is important. If you get stuck at the turnstile for more than one second, people ­behind you will start to groan.”

Cheung said Octopus positions itself as a payment system for smaller transactions, but it has plans to lift the existing HK$1,000 limit to HK$3,000 in November.

In November, all stored value facility operators in Hong Kong, such as Octopus, will be required to have a licence.

The Hong Kong Monetary ­Authority said there were now more than 30 applicants, compared with about 20 in April, and that 55 per cent of the latest applicants were from Hong Kong, 25 per cent from the mainland and 20 per cent from Europe and the United States.

Apple Pay, which does not store any value in its payment ­system, is not required to apply for the licence. The spending limit on Apple Pay depends on the limit of the credit card attached.

Other than Apple Pay and ­Octopus, Hong Kong home-grown stored value payment start-up TNG has entered the race and plans to allow it to be used to pay bus fares in a few months.

TNG has about 300,000 active registered users and is available on about 2,000 taxis and some 500 stores.

TNG chief executive Alex Kong Hing-yan said the firm aimed to treble its coverage to about 1,500 stores in the near future while its licence application awaits the approval of the monetary authority.

“Only if we have an impact on Octopus then can we be successful,” Kong said.

Alibaba Group is the owner of the South China Morning Post.