Hong Kong will embrace mobile payments – eventually
Ken Chu says it will take time for Hongkongers to adapt to using mobile phones to pay for goods and services, as they need to overcome the habit of using the Octopus card, as well as security concerns
I often hear people deplore that Hong Kong is lagging so far behind mainland China in technology because mobile payments like Alipay and WeChat Pay are not widely available. More accurately, Hong Kong has just started to play catch-up in mobile payments.
To be fair, Hong Kong is not an innovation and technology backwater. It may be true that we do not have a robust innovation and technology industry and market, or giant e-commerce and tech companies. But, as far as innovation, science and technology are concerned, we do quite well.
Indeed, our universities, two of which are among the top 50 in the world, often achieve groundbreaking discoveries in scientific research projects. Sadly, ordinary folks are unaware of them.
Hong Kong is also among the top innovation start-up hubs globally, according to a world-leading US research group. The issue here, then, is not so much whether Hong Kong is lagging behind in innovation and technology but how quickly mobile payments can dominate the consumer market.
Secretary for Commerce and Economic Development Edward Yau Tang-wah attributed our attitude to mobile payments to our successful Octopus card.
Launched in 1997, the Octopus card was hailed as a pioneer in contactless, cashless payment methods. Over the years, Hongkongers became accustomed to using the card to pay public transport fares, buy goods at supermarkets and pay at fast-food stores. It is also easy to top up the value of the card at any convenience store in the city. Old habits die hard, and it will take time and incentives to get people to change.
Decades ago, “Don’t leave home without it” was a popular advertising slogan for a credit card commercial, summarising the usefulness of such a card. Today, smartphones have acquired the same status and become a daily necessity. In mainland China, it is even said that it wouldn’t be a problem to leave a wallet at home but one absolutely cannot leave home without a mobile phone; they can be used to buy almost anything, anywhere in the country. The ubiquity of mobile phones provides fertile ground for the growth of the mobile payment market.
Hong Kong boasts one of the highest mobile phone penetration rates in the world, yet its mobile payment market is still in its infancy. One reason often cited is security; in fact, the secretary for innovation and technology once said in a radio interview that he preferred an Octopus card to any e-wallet because of the security risk. However, stored-value smart cards like Octopus are not as convenient and versatile as most mobile payment apps and methods. With the latter, there’s no need to carry a card; instead, just use an enabled mobile phone to make the payment.
There is another challenge to the growth of the mobile payment market in Hong Kong: privacy concerns. Some people shudder at the idea that an electronic mobile payment service provider can learn when and where a user has made a purchase or transaction, as well as what they bought.
The mobile revolution is sweeping the globe because of its tremendous convenience. A thriving mobile payment market will surely empower the fintech industry. If Hong Kong is to hang on to its status as an international financial centre and innovation hub, the city must embrace mobile payment technology, to bring benefits to the government, economy and individuals. For the government, tax evasion and money laundering can be largely eliminated. For businesses, a more attractive and effective consumer incentive scheme can be structured to expand its market share. And, for individual consumers, convenience is the biggest benefit.
It will take time for Hong Kong consumers to truly appreciate the convenience of mobile payment apps but I am confident that the scheme will soon be widely adopted in the city; after all, Hongkongers are highly receptive to new things.
Dr Ken Chu is group chairman and CEO of the Mission Hills Group and a National Committee member of the Chinese People’s Political Consultative Conference