Smart payment gaining traction among HK retailers, consumers

The AlipayHK Smart Payment Popularity Index has improved 8.3 points to 62.2 (Image AlipayHK)

Hong Kong retailers and consumers are showing an increasing willingness to adopt smart payment technologies, according to new research from the Hong Kong Productivity Council and Alipay Hong Kong.

The second release of the AlipayHK Smart Payment Popularity Index shows an overall readiness of 62.2, which represents an 8.3 point increase from its inaugural release six months ago.

The index is a measure of both retailers' readiness to support smart payments, as well as acceptance of smart payment among consumers.

According to the survey, the retailer smart payment readiness level has increased 6 points over the past six months to 68.6. The results also show a 15.5 point rise in retailers' willingness to adopt smart payment to 76.7.

Around 95% of retailers surveyed provide non-cash payment methods, with credit cards being the most popular (86%), followed by mobile payment (60%).

Meanwhile, consumer acceptance of smart payment improved from 45.5 to 55.9. The percentage of consumers having used mobile payment also increased from 30% to around 48%.

But the survey shows that a lack of confidence in the security of smart payment remains a significant barrier to further adoption, with the sub index score remaining below the 50 mark at 42. Key hindrances to the adoption of mobile payment include a lack of familiarity with its operation (69%) and worries about personal data leakage (62%).

Nevertheless, the survey identified strong demand for the adoption of smart payment functionality in other industries beyond retail. For example, nearly half (47%) of consumers would be willing to try alternate e-payment methods such as NFC or QR code payments for transportation.

Likewise, nearly half of consumers are willing to try international e-payment features provided by local e-wallet suppliers while traveling outside of Hong Kong. But those who are unwilling to do so cited concerns including cybersecurity (79%), fears of losing their mobile (68%), ad worries about network connectivity (58%).

“The survey has shown pressing public demand for smart payment in transport and travel, which will be our development focus for this year,” says Jennifer Tan, CEO of Alipay Payment Services (HK) Ltd.

On the transportation front, AlipayHK is piloting the use of Alipay QR code payment at two green minibus routes in Hong Kong. The company plans to expand to more routes in the near future. In addition, AlipayHK will launch QR Code payment at MTR stations starting from mid 2020, enabling users to take MTR rides via their mobile phones. AlipayHK was awarded MTR’s QR Code payment system provider contract last November.

Besides Hong Kong, AlipayHK also plans to extend the use of AlipayHK wallet to China.  “We hope to launch cross-border payment function in the near future so that local users can make payments in China,” says Tan. “We’re discussing with the regulators and banks in China on issues such as anti-money laundering and foreign exchange policies.”

Commenting on the release of the research, HKPC director (digital) Edmond Lai said the council is pleased to see increasing acceptance of smart payment among retailers.

“This represents retailers’ willingness to become more digitised, so as to enhance the operations efficiency at large. These contribute to the development of smart city via versatile payment solutions and hence solve the consumers’ pain-points,” he said.

“HKPC is ready to provide professional technical consultancies for retailers or SMEs that wishes to digitise their operations. Through technology upgrade and getting ready to accept smart payment, companies can further increase their competitiveness in the wave of Enterprise 4.0.”

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