2018 | ISSUE 1 English繁體简体
Integrated Solutions eNewsletter
THEME STORY: Hong Kong Re-industrialization. Opportunity?

HK I.T. needs to CATCH UP!

Will Electronic Payment play a Vitally Important Role in Future?

With the advancement in technology, there is an increase in activities that could be done through the internet. This also causes the rising popularity of electronic payment.

Electronic payment refers to the service that involves monetary payment or transfer. Although it is not until 2016 that the Hong Kong Monetary Authority had finally issued the first batch of registered Stored Value Facility (SVF) license, electronic payment involving SVF is not a new idea. Since the 90s, electronic payment has been developed in response to the demand of e-commerce in places such as the United States and Canada. Electronic payment has gradually evolved into a mature technology through time.

There are mainly three types of electronic payment: online payment, phone payment, and mobile payment. Online payment refers to a payment type that is based on the Internet. The enterprises and customers utilize the Internet as a medium to conduct payment service. As for phone payment, it majorly stresses on the use of phone and how it integrates with the banking system to conduct payment. Lastly, for mobile payment, transactions are made via mobile devices. The customers can use a mobile device to pay for services and goods without paying physically with cash, cheque or credit cards. The prevalence of mobile devices has set grounds for the development of electronic payment and e-commerce.

Taking Hong Kong as an example, the use of electronic payment is composed of 60% of the consumer expenses. Examples of electronic payment options are credit/debit cards and Octopus card. The way that electronic payment has redefined the possibility of payment method has also brought new directions for e-commerce. Electronic payment has quite a lot of advantages. One of the prominent ones is that such payment method is very effective and convenient. It only takes users very little time to conduct any scale of payment. It also costs less in terms of operations. On the other hand, since the payments are now conducted electronically, enterprises can utilize the data collected from the transaction for analysis which in turn brings greater benefits to its business.

There are also a few types of tools to facilitate electronic payment. They include electronic money, electronic credit cards, and electronic cheque. One of the most popular tools is the electronic wallet. It is a device that allows users to make electronic payment/transaction. Electronic wallets use the online banking system as a basis to transmit encrypted data in order to complete a transaction/payment via online interface or software/apps. The enterprise usually provides a free-of-charge online interface or software/apps to allow users to directly link the payment activities to their own banking accounts. The software/app includes functions such as e-certificate, identity authorization and transaction record saving which all allow electronic payment to be extremely competitive in comparison with the traditional payment method.

Despite the merits of electronic payment, it also has its flaws. First, the fact that electronic payment relies greatly on the online banking system makes it prone to the risks of fraud, counterfeit and the identity authentication issues. When implementing electronic payment, the enterprise should set up a comprehensive and flexible plan to monitor, assess and handle any possible problems. Enterprise should pay close attention to the data encryption in order to prevent information and data leakage. Apart from this, electronic payment also bears the risk of being attacked by hackers and computer virus.

With the prevalence of electronic payment, cyber-theft has been on the rise and this has posed a huge challenge to the electronic payment and online banking services. Cyber-theft can be conducted via some malicious mobile app which is able to hack into some contactless payment system such as payWave by stealing the user details of the cardholder or using the IP address of other people to perform some illegal transaction. While promoting the development of the electronic payment, we should also be aware of the danger.

In short, although the development of electronic payment opens up new opportunities for enterprise to expand their business, it comes along with risks as well. Therefore, the enterprise should keep itself up to date and stay cautious when examining and developing the possibilities of electronic payment.