HSBC takes on Alipay, WeChat Pay with new PayMe service for Hong Kong businesses

HSBC said on Thursday that it had begun beta testing of its PayMe System for businesses, with 15 retailers in Hong Kong now able to accept payments from customers using the e-wallet app.

The small businesses, ranging from cafes and restaurants to a perfume boutique and a photographer, have been testing the system with HSBC staffers for about two months, Greg Chapman, head of PayMe, said.

The expansion to business customers adds PayMe to an increasingly crowded field of mobile payment services already operating in Hong Kong.

On Thursday, the system went live for retailers to begin accepting payments from the public, Chapman said.

“What we want to make sure of is that we’re meeting the needs of Hong Kong consumers,” said Greg Hingston, HSBC’s head of retail banking and wealth management for Hong Kong. “If consumers feel that a wallet in the mobile phone is the most convenient way to make payments, that’s what we want to provide them with.”

The beta test is expected to add additional retailers in the coming months as Hong Kong’s biggest bank expands its peer-to-peer payment service to merchants who have a business banking account with HSBC.

“We are keen to be very open and upfront to say this is a test,” Hingston said. “We want to get as much feedback as we can so that we can refine our product before we go out to the mass market.”

Since introducing the e-wallet app two years ago, HSBC has added nearly 1.5 million users.

Business accounts customers will be able to download a separate app that allows them to receive payments using QR codes, provide refunds and manage their takings. Business customers also can chat directly with HSBC representatives via the app.

HSBC said it would waive transaction fees to businesses for the first three months as part of an early bird offer. After that, a fee of 1.5 per cent would be applied to each transaction, which the bank said was “competitive” in the market.

In the future, Hingston said HSBC envisions merchants being able to use the app to make tailored offers to regular customers who opt in.

“If offers are going to be used, they’ve got to be relevant to the consumer. The worst thing in the world is when consumers get stuff that is put in front of them that is not relevant,” Hingston said. “We’ve got to do it in a way that is hyper-transparent as well.”

The move takes PayMe into direct competition with e-wallet services offered by the Chinese tech giants Alibaba Group Holding and Tencent Holdings, who run Alipay and WeChat Pay respectively, the dominant mobile payment services in mainland China.

Alibaba is the parent company of the South China Morning Post.

The introduction of e-wallets in Hong Kong has not been without its pitfalls.

HSBC added extra layers of security to the PayMe consumer app in December after 20 accounts were illegally accessed as part of an email scam.

Last year, the Hong Kong Monetary Authority was forced to order e-wallet operators to temporarily suspend auto top-up transfers via the city’s Faster Payment System soon after it was introduced because several fraud cases had emerged.

The smart payment system is designed to allow instant transfers of funds between banks and stored-value facilities, such as e-wallets.