Hong Kong Monetary Authority issues licences to eight more stored-value service providers
Development comes as one-year grace period to obtain licences nears and as some firms struggle to quit the business
A second batch of stored-value service providers received licences from the Monetary Authority on Friday while other unlicensed providers struggle to quit the business.
A law came into effect last November to regulate the previously unsupervised electronic payment business. Providers were given one year to obtain licences. That period expires in mid-November.
Eight providers received their licences on Friday, bringing the total to 13 after the first batch of five was approved in August. The latest batch includes Paypal and Autotoll.
More than 20 providers initially applied for licences. While the authority did not say why some had dropped out, it granted a temporary exemption to five services with three companies – Bank of China, Travelex Card Services and Sun Hung Kai Real Estate Agency. They will get an extra three to six months to transition out of the business.
Another eight to 10 companies have expressed an interest in obtaining a licence.
Henry Cheng, an executive director at the authority, said the main challenge for firms transitioning out of the business was that many of their users were “untraceable because they did not provide contact information when they signed up for the service.”
“The other challenge is that it’s hard for [foreign] users to withdraw their money from these services [due to geographical restrictions],” he said, adding that the temporary exemptions would allow people more time to spend the remaining money deposited with the companies.
According to Howard Lee, a senior executive director at the authority, the remaining value with the five services totalled about HK$20 million. He said this would not pose a threat to Hong Kong’s payment or financial systems.
Cheng said “several companies” which failed to obtain a licence or an exemption would suspend their services on November 13, when the grace period expires.
Cheng also clarified that Alipay would not permanently store user data, which was reported by the Consumer Council last month.
The second batch of licensees are PayPal, Autotoll, Optal, 33 Financial, UniCard, ePaylinks, Transforex and K & R International. The first batch comprised Alipay Wallet, Tap & Go run by PCCW’s HKT, WeChat Pay, TNG Wallet and Octopus & O! ePay run by Octopus Cards.
Alipay is owned and operated by Ant Financial Services, which is an affiliated company of Alibaba, which owns the South China Morning Post.