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Mobile payments

Hongkongers still not convinced by smart payment technology, but officials optimistic digital future lies ahead

New Hong Kong Productivity Council survey shows 70 per cent of city shoppers had not used method to buy goods or services

PUBLISHED : Thursday, 05 July, 2018, 9:00am
UPDATED : Thursday, 05 July, 2018, 4:32pm

About 70 per cent of Hongkongers have never paid for something using their smartphone, and more than 50 per cent said they would not do so, a new survey revealed on Wednesday.

While Hong Kong’s consumers lag behind shoppers in other markets using smart payment systems, officials are predicting a largely digital future for the city.

The survey conducted by the Hong Kong Productivity Council found that only 29 per cent of respondents had used a mobile payment system, and 57 per cent said they would not use one.

Those figures put the city some distance behind countries such as China and Sweden, which are considered world leaders in the smart payment market. However, Wilson Wong Ka-wai, the council’s general manager of information technology, was optimistic about the digitalisation of payment in the future.

“The concept of smart payment is gradually taking root in Hong Kong,” Wong said.

Hong Kong’s mobile payment use ranking is based on the AlipayHK Smart Payment Popularity Index, which measures the readiness level of retailers in adopting different smart payment methods, and the acceptance level of smart payment among consumers.

Wong noted that the city’s overall index stands at 53.9 out of 100, with local retailers reaching a passing mark of 62.2. Consumers however were more hesitant about the technology, with the acceptance level at 45.5, mainly because of “unfamiliarity with the operation” and “worries surrounding the potential loss of personal data”.

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While Hong Kong is still playing catch-up, Wong said 98 per cent of the population in China had replaced cash with mobile payment. In Sweden that number was 60 per cent, but in Canada it was 12 per cent, while between 2 and 6 per cent of shoppers used the payment method in Japan, the United States and Germany.

The survey, which was sponsored by Alipay Payment Services (HK) Limited, questioned 428 retailers and 1049 shoppers between May and June. It found only 20 per cent of consumers had used a mobile payment method “regularly” or “occasionally” in the past year.

Other smart payment methods include contactless payment via smartwatches, scanning QR codes, person-to-person transfer via e-wallets, and inbuilt app payment systems.

Hong Kong started its push in digital and mobile payments in late 2016 when it issued stored value facilities licences to a number of companies, including Octopus, AlipayHK, WeChat Pay, Samsung Pay and TNG Wallet.

The mobile wallet, AlipayHK, said 1.5 million citizens were using its services and have adopted its payment method. Its arch-rival WeChat, which includes its payment services provider WeChat Pay, claimed it had about three million active users per month.

Jennifer Tan, chief executive of AlipayHK, said the public might misunderstand the requirements for mobile payment.

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“To enjoy the basic function of the service, only a mobile number is needed and users do not necessarily need to link their accounts with credit cards or bank cards; instead, they can simply top-up their e-wallets in different locations in Hong Kong, like at convenience stores.”

Since the roll-out of different mobile payment services during the past two years, the local service provider of contactless cards Octopus, has also extended its service and provided various incentives, such as a custom-made app for the taxi industry, to compete in the heated e-payment market.

AlipayHK is a unit of Ant Financial Services Group, an affiliate of Alibaba Group Holding which owns the South China Morning Post.