HK government keen on fintech advancement in city, says minister
Chan Ka-keung says city lags mainland peers in fintech adoption, but efforts are on to bridge the gap
The Hong Kong government is keen to encourage the development of more mobile payment services so that it can reduce the use of cash in the city, according to a top government official.
Chan Ka-keung, the Secretary for Financial Services and the Treasury , wrote in his official blog on Sunday that Hong Kong needs to do more on the mobile payment front as it lagged mainland peers in sectors like using smart phones for payment.
In his article titled “Can Hong Kong develop into a cashless city?”, Chan said: “There are some concerns about the slow development of financial technology in Hong Kong, particularly in terms of mobile payment services for the retail sector and that Hong Kong is way behind mainland China. In China, the mobile payment system is already well-developed,” Chan said.
“Such payment systems have enabled many companies to allow customers to make payments through mobile phones and also cut transaction costs. This is something that Hong Kong needs to develop quickly and there is still enough room for fintech growth in the city,” Chan said.
According to Chan, since Hong Kong introduced laws in November 2015 covering regulations for storage card and other mobile payment operators, the city has seen an encouraging growth in such services. “We have already issues licences to 13 operators,” he said.
“I am happy to see that these operators have launched services to provide a low cost and efficient payment system in Hong Kong. I expect the mobile payment sector in Hong Kong to see further development and broaden its horizons,” Chan said.
Part of the reason why Hong Kong has been realtively slow in adoption of mobile payments is because the city already had a developed and mature credit card payment system. On the mainland, though the credit card system and personal credit system are well developed now, priority was given for the development of mobile payment systems to meet rising demand from customers.
He said the local banking sector was keen on developing fintech and for using technology to provide new generation of electronic banking services to customers.
“Some say the new financial service providers would replace the traditional players, just like MP3 had replaced compact discs in the music industry. However, people still pay to buy music in different formats. But in financial services, the new fintech start-ups and the traditional banking businesses are not competitors. Rather, they complement each other to provide lower costs and better services for customers,” Chan said.
In September, Chan told the Post that both the Securities and Futures Commission as well as the Office of Commissioner of Insurance have introduced regulatory measures similar to the regulatory sandbox introduced by the Hong Kong Monetary Authority in the same month.
The HKMA sandbox allows banks to introduce a pilot scheme to introduce new technology for banking services for selective clients without the need to get full regulatory approval. Some banks such as Citibank and Standard Chartered Bank have already used these technology advancements for gains.