The Inevitable Adevnt of E-payment
We have lived with the COVID-19 pandemic for more
than a year. It has not only drastically changed our
ways of life, but also transformed the landscape of the
market. Customers have changed the consumption
behaviours. For example, they tend to avoid direct
contact with others during the transaction. In this light,
contactless payment has been widely accepted and
adopted by the general public. According to The Global
Payments Report 2021 conducted by Worldpay, Hong
Kong’ s cash transactions accounted for 9% of the
in-store consumption in 2020, resulting a year-on-year
decrease of 17%. It is expected that the proportion of
cash transactions will further drop to 1.6% in 2024, the
lowest in the Asia-Pacific region. On the other hand,
e-wallet will become the fastest-growing payment
method and is expected to account for 36% of the total
transaction volume in 2024, up 22% from 2020.
Contactless Payment
The most distinguishable feature of contactless
payment is its PIN-free and signature-free payment
method for transaction. There are three main forms of
contactlesspayment, namely, Near - field
Communication (NFC), Radio Frequency IDentification
(RFID) and QR Code. The first one is done by storing
the data of the credit or debit card in the mobile
payment system or e-wallet and using NFC to perform
data transfer between two electronic devices within a
short distance. The second type is to embed the RFID
technology into the credit or debit card. Customers
simply tap the card on the card reader to complete the
payment. Octopus Card is the perfect example of such
type. The last method is to scan the QR codes for
payment. Compared to the traditional payment method,
these contactless payment methods are much more
convenient, faster and safer.
First of all, contactless payment normally takes only
10-15 seconds for the entire transaction process,
whereas the traditional integrated circuit card requires
30-40 seconds. It significantly reduces the time for
transaction, which suits the rapid pace of modern life
and enhances the work proficiency for the merchants.
Moreover, the contactless payment method does not
have minimum amount, which is convenient for
customers to make small amount transactions.
Last but not least, every contactless transaction will
provide the payment terminal a set of unique
passwords, which works only once without saving any
card holders’ personal particulars, which can better protect the holder’s privacy and reduce the risk of theft
or fraudulence.
Promoting Popularisation of e-Payment
The Hong Kong Government has played a proactive
role in promoting popularisation of e-payment. In
November 2019, Hong Kong citizens can start to use
Faster Payment System (FPS) to pay their government
bills. In October 2020, the government launched the
subsidy scheme for promotion of contactless payment
in public markets, in which tenants of FEHD market
stalls are offered a one-off subsidy at a flat rate of
$5,000 for setting up contactless payment systems.
With an increase in the quantity of e-payment systems
and equipment, citizens are encouraged to adopt
e-payment more frequently in their daily lives, with a
view to changing their habitual behaviours from using
cash for transactions. According to Budget 2021/22
announced earlier this year, the government is going to
issue electronic consumption vouchers with a total
value of $5,000 to eligible citizens. The scheme serves
as an incentive that prompts the business to adopt
contactless payment in order to improve their revenues.
It also facilitates citizens’ motivation to apply e-payment
and have a taste of the convenience brought by it. In
the long term, the scheme helps popularise the use of
e-payment in Hong Kong.
The Inevitable Advent of e-Payment
As Visa Consumer Payment Attitudes Study 2.0 shows,
63% of the respondents choose e-payment for small
transactions (HKD$100-199), which sees a 7%
increase compared to 2019. In addition, 41% of the
respondents, which is greater than the number in 2019
by 8%, mention that they can use other payment means
over cash for more than a week. It suggests that more
and more Hong Kong people tend to adopt e-payment
nowadays. Although some people in the society still
hold a dubious attitude towards e-payment for its risk of
personal data breach, or they just get used to using
cash for transactions, there is a need for change for the
sake of social progress, just like how electric lamp,
microwave oven and automobile changed our human
history by leading us to a more convenient life. We
should not confine ourselves to the traditions and
habits. Instead, we should step forward and keep up
with the times. Partnered with HSBC, ISL has now
introduced FPS’ payment function for its flagship
product ReportNOW. It helps users save 3%-5%
handling fee for each transaction. For more details,
please read “ISL Spotlight” of this issue of newsletter, or
contact us at +852 2263 6106 or enquiry@isl.com.hk.
