In the past year, several banks in Hong Kong have successively launched mobile wallet services. Users only need to have a mobile phone with Near Field Communication (NFC) capability, download the relevant application, and input credit card data to make payments directly at merchants equipped with the relevant sensors. As for the Octopus card, after launching online payment services in collaboration with Taobao in February, it announced earlier this month that it will introduce "person-to-person" (P2P) payment services within this year. This shows that small electronic payment services in Hong Kong are becoming increasingly convenient, and relevant institutions hope to secure a position in this market.
"As mobile phones' central processing units become faster, more powerful, and more secure, banks and companies that handle payments are becoming increasingly confident in mobile payments. I believe this is definitely a trend," said Wang Shi, Associate Professor of Computer Science at City University of Hong Kong.
Wang Shi, who specializes in electronic currency and e-commerce, stated that mobile wallets in Hong Kong are still in the early stages, primarily focusing on credit card payments. There is still much room for development, such as currently linking one mobile phone to one credit card, but in the future, it should support multiple credit cards, as well as P2P services and fund transfers, bringing more convenience to users.
The Octopus card is actively expanding various payment services, which Wang believes is related to market competition. Taking the collaboration between Octopus and Taobao as an example, it reflects Octopus's desire to expand its market into online electronic transactions, a market that has traditionally been dominated by credit cards. However, the transaction process requires the use of an Octopus card and a mobile phone equipped with NFC technology to complete the transaction, which is less advantageous compared to mobile wallets.
Whether the Octopus card can maintain its position in the small payment market may depend on the usage of its upcoming P2P payment service. It is reported that the P2P service of Octopus will allow users to transfer money to each other, operating similarly to instant messaging applications on smartphones, aiming to make the use of Octopus more extensive and flexible.
Regarding security issues, Wang Shi mentioned that mobile wallets are still a relatively new concept in Hong Kong, and everyone is quite concerned about security, especially with frequent incidents of mobile phones being stolen or lost. Additionally, citizens frequently change their phones, which raises concerns about handling data from old phones and the operation of new phones. However, both Octopus and mobile wallets have a limit on the amount of money that can be stored, approximately a few hundred to 1,000 Hong Kong dollars, which can reduce the risk for users and the liability of banks or service providers.
Furthermore, Wang Shi believes that although Hong Kong citizens have become accustomed to using electronic wallets for small payments, completely replacing traditional currency may not be achievable in the short term, mainly because the anonymity of traditional currency cannot be replicated by electronic currency. Except for Bitcoin, which has anonymity, the vast majority of electronic currency transactions can be tracked online, and the electronic wallets commonly seen in Hong Kong are basically linked to credit cards, making the accounts transparent. Privacy is very important for ordinary customers.
It is understood that Hong Kong lags behind Europe, America, and even the mainland in terms of the popularity of electronic wallets. As for when it can catch up, Wang Shi believes that Hong Kong is ultimately a small city, and the market is not very large. It is not necessary to establish a payment channel locally; rather, how to interact with neighboring regions and integrate into the larger market is more important than creating something independently.
"A city is very limited, whether in terms of resources, market size, etc., and cannot be compared with the mainland. It is more effective to study how to cooperate more between the two places, for example, how Taobao has started accepting Octopus and credit cards, and how Hong Kong can cooperate in these areas. Such considerations are more effective," he said. Now, banks in Hong Kong have taken the first step by developing some payment applications. Next, they could consider collaborating more with companies in neighboring regions like Alibaba Cloud to allow users to use these mobile payment methods more conveniently, which is expected to yield better results.
