Despite the multitude of payment methods in Hong Kong, our city very much remains a traditional "cash is king" society and also relies heavily on plastic cards.
However over the past year, we've seen growth in the number of digital wallet services, such as Octopus' O! ePay, alongside Tap & Go (HKT Payments) embedded into your SIM card (though limited to Android users only for now). Not to mention the flurry of WeChat Pay and Alipay promotions, an open invite to our Mainland visitors.
As of current, Hong Kong has a total of 16 digital payment options registered under Hong Kong Monetary Authority's (HKMA) Stored Value Facilities scheme (SVF). In December 2017 alone there were 43.5 million registered users of these 16 SVF accounts, with 1.4 billion transactions amounting to a total value HKD$31.8bn. Based off the total transaction value, HKD$18.9bn was from point-of-sale payments, HKD$12.3bn from online expenditure and HK$0.6bn in P2P funds transfers.
P2P wallets also becoming popular
With the obstacles of transferring money in Hong Kong from bank to bank directly, HSBC's PayMe has become a widely popular payment channel in social gatherings - and even within independent retailers.
Although these P2P wallets are still not available for merchant use, the popularity and ease of PayMe among millennials has cleverly induced HK Instagram shop owners and independent boutiques to start taking transactions through PayMe.
Local retailers have also noted demand for PayMe and we expect that this service will surely be extended to merchants in the future. Even Apple itself, ironically, has started to open its payment gateway to Alipay in its stores to cater to the Chinese market. With WhatsApp launching a beta trial in India for its P2P wallet, we can only be hopeful this will be extended to Hong Kong, given the high number of Whatsapp users in the local market.
What does this mean for retail?
Retailers need to open up and update their payment solutions to these new and emerging payment methods as they become apparent. For instance, WeChat Pay was launched seven years later than Alipay, yet was adopted by its users virtually overnight.
By offering these emerging payments, retailers not only build a more compelling ecosystem, but also ensure that payment is never an issue when it comes to a customer who is ready to buy. This is critical as today’s consumer expects a frictionless shopping experience.
It is recommended for retailers to work with a technology partner, such as Tofugear, which offers the most up-to-date suite of payments, which are also centralised in data and reporting.
Tofugear's Omnitech solution currently accepts Apple Pay, Android Pay, WeChat Pay, AliPay and even Bitcoin, but we’ll always keep tabs on any new payment trends.
Tiffany Lung is a Retail Tech Analyst at tofugear specialising in International Fashion & FMCG industries. In the past she has worked in both London and Hong Kong with numerous retailers, both front-line and back-end retail.