Hong Kong must look be­yond mobile pay­ments to ben­e­fit from fin­tech

China Daily (Hong Kong) - - COMMENT - PETER LIANG

It is widely rec­og­nized that Hong Kong is fall­ing woe­fully be­hind its main re­gional ri­val Sin­ga­pore and al­most all other ma­jor East Asian ci­ties in the fin­tech race. But other than los­ing an­other brag­ging right, what does this much-lamented short­com­ing mean to Hong Kong and its peo­ple?

It’s hard to imag­ine that banks in Hong Kong have all fallen asleep while their com­peti­tors in other ci­ties are rac­ing ahead of them in the fin­tech con­test. The banks we know about are big boys who can take care of them­selves very well in­deed. You can bet that if they see tech­nol­ogy that can en­hance their prof­its and ex­pand their mar­ket shares, they will put money and ef­fort into adopt­ing it.

Fin­tech, short for fi­nan­cial tech­nol­ogy, isn’t a new con­cept af­ter all, and the tech­nolo­gies in­volved in de­vel­op­ing it are mostly avail­able in the mar­ket­place. Of course, pro­pri­etary soft­ware is needed to make it work. But this is not rocket sci­ence.

Many com­men­ta­tors have lamented that Hong Kong is lag­ging be­hind other re­gional ci­ties, notably Sin­ga­pore and Shen­zhen, in pro­gress­ing to­ward a cash­less so­ci­ety. That’s the yard­stick of most rel­e­vance to the pub­lic. But most peo­ple in Hong Kong don’t find the deficit to be that much of an in­con­ve­nience.

To be sure, many small shops and cater­ers around town ac­cept noth­ing but cash in ex­change for goods and ser­vices. Taxi driv­ers, in par­tic­u­lar, are adamant that they will only ac­cept cash so they can keep the small change as tips.

As long as you don’t take a taxi, or don’t feel the need to pa­tron­ize those cash-only out­lets, you can get around Hong Kong car­ry­ing only your credit cards and the ubiq­ui­tous Oc­to­pus card for all pub­lic trans­porta­tion (ex­cept taxis), gro­cery shop­ping at su­per­mar­kets and con­ve­nience stores, and din­ing at most chain res­tau­rants or fast-food out­lets.

Be­fore you do that, re­mem­ber to ar­range for an auto-recharge of your Oc­to­pus card. You will need to go to your bank to do this. But you will only need to do this once and then it is good to go.

Credit cards would come in handy for shop­ping for big-ticket items at depart­ment stores or eat­ing out at fancy res­tau­rants. Some spe­cialty shops sell­ing elec­tron­ics prod­ucts don’t ac­cept credit cards, pre­fer­ring di­rect debit bank cards in­stead. So, bring yours along if you plan on buy­ing a pair of ex­otic head­phones or a tube am­pli­fier.

Some com­men­ta­tors have talked glow­ingly about the con­ve­nience of on­line shop­ping and

As long as you don’t take a taxi, or don’t feel the need to pa­tron­ize those cash-only out­lets, you can get around Hong Kong car­ry­ing only your credit cards and the ubiq­ui­tous Oc­to­pus card...”

ad­vanced book­ing at res­tau­rants and cine­mas. You can do all that in Hong Kong as well with your mobile phone. In fact Ama­zon, which doesn’t have an op­er­a­tion in Hong Kong, is more than happy to send you what you or­dered from its US web­site.

You’d be amazed how much cheaper it is to shop on­line for a wide range of con­sumer goods, par­tic­u­larly cloth­ing and ac­ces­sories, even af­ter fac­tor­ing in the mail­ing cost, than to buy the same items in Hong Kong where the ven­dors have to mark up their prices to cover high rentals.

Con­sumers’ old habits tend to die hard. De­spite the con­ve­nience of the PPS pay­ment ser­vice which has been around for many years, there are still lines of peo­ple, cash in hand, wait­ing to pay for their util­ity bills at the be­gin­ning of ev­ery month. This chore should have be­come an­tique by now.

But such in­ci­dents should not be mis­taken as ev­i­dence to con­demn Hong Kong’s back­ward­ness in fin­tech. They are just a quirky con­sumers’ pref­er­ence which, no doubt, will die out in time.

There are still peo­ple who har­bor a deep mis­trust of on­line pay­ments, fear­ing that hack­ers will break into the sys­tem and steal their money. This is some­thing that con­cerns even the most ar­dent pro­po­nent of fin­tech.

Con­sumers can only trust that the fi­nan­cial in­sti­tu­tions that ren­der fin­tech ser­vices have taken ev­ery step to en­sure that they are se­cured. It’s like trust­ing banks to man­age de­pos­i­tors’ money pru­dently.

Even if you’re a cash­less kind of per­son, do carry some cash when you go out, just in case. It hap­pened to me once a long while ago. Af­ter eat­ing at an up­mar­ket restau­rant, I asked for the bill only to be told by the cour­te­ous waiter that the line to the card cen­ters had bro­ken down.

The au­thor is a vet­eran cur­rent af­fairs com­men­ta­tor.

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