Gi­ants of e-pay­ment fol­low cus­tomers abroad

China Daily (USA) - - HONG KONG - By CHAI HUA in Shen­zhen and LUO WEITENG in Hong Kong

head of con­ve­nience-store sec­tor of the Rain­bow Depart­ment Store

The largest in­vest­ment of the lat­est re­tail fa­cil­i­ties is no longer rent and la­bor, but tech­nol­ogy.”

For years, the Chi­nese main­land’s twin pil­lars of dig­i­tal pay­ment — bil­lion­aire Jack Ma Yun’s Ali­pay and Ten­cent’s Wechat Pay — have been branch­ing out world­wide to chase the more than 130 mil­lion big-spend­ing main­land hol­i­day­mak­ers who have be­come a com­mon sight across the globe, in­clud­ing Hong Kong.

But more im­por­tantly Hong Kong con­sumers and re­tail­ers also started to join the fray in a more proac­tive man­ner this year.

On the main­land, which has led the de­vel­op­ment of mo­bile phone pay­ment tech­nol­ogy and ap­pli­ca­tions, peo­ple are al­ready ac­cus­tomed to pay­ing for ev­ery­thing with smart­phones — from big su­per­mar­kets to night-mar­ket ven­dors.

Now they could keep that habit abroad as main­land mo­bile-pay­ment ser­vice providers ex­pand to in­ter­na­tional des­ti­na­tions. Pay­ments are much more com­pli­cated abroad be­cause of cur­rency ex­change, so dig­i­tal so­lu­tions are wel­come.

Main­land cus­tomers now need only pay through their own dig­i­tal ren­minbi-ac­count with WeChat Pay or Ali­pay, and then Hong Kong sellers will au­to­mat­i­cally re­ceive pay­ment in Hong Kong dol­lars, con­verted on real-time ex­change rate at the Bank of China.

As many as 8,000 re­tail­ers in Hong Kong now ac­cept Ali­pay’s stan­dard yuan-based trans­ac­tion app, while WeChat Pay is avail­able in Sasa, Bon­jour Cos­met­ics, Chow Tai Fook, Broad­way Elec­tron­ics and 900 7-Eleven con­ve­nience stores in the me­trop­o­lis.

Cus­tomers are not the only ben­e­fi­cia­ries of the pay­ment method — re­tail­ers also gain.

Store own­ers can make op­er­at­ing anal­y­sis based on data re­ported by WeChat, in­clud­ing sales vol­ume, num­ber of old and new clients, pay­ment’s time dis­tri­bu­tion and av­er­age spend­ing.

In ad­di­tion, cus­tomers can also choose to be­come mem­bers of shops’ WeChat pub­lic ac­counts and re­ceive pro­mo­tion in­for­ma­tion.

Wat­sons says its main­land branches at­tracted one mil­lion new mem­bers through the tool in nine months;the pro­por­tion of sales to mem­bers in­creased from 30 per­cent to 60 per­cent.

Re­becca Wong, PwC China tax partner of con­sumer goods and re­tail in­dus­try, be­lieves Hong Kong re­tail­ers’ rent and la­bor costs are high so they must find new so­lu­tions to in­crease op­er­at­ing ef­fi­ciency, but still need some time for mo­bile pay­ment to be­come a main­stream method in the city.

“Be­cause the mo­tive for Hong Kong peo­ple to change from the pre­vail­ing credit-card and smart cards is not high, plus lo­cal peo­ple have con­cerns about pri­vate data se­cu­rity,” she ex­plained.

But Ali­pay went the ex­tra mile to lo­cal­ize its pay­ment-by-smart­phone for Hong Kong users in May, with the maiden ver­sion of Ali­pay in a lo­cal cur­rency. More than 2,000 brick-and-mor­tar stores such as Wat­sons, Fortress, Chow Tai Fook, Sasa, Ocean Park as well as food search en­gine Open Rice came on board from the very start.

“The story of dig­i­tal pay­ments in Hong Kong should not sim­ply dwell on prospects of serv­ing the tech-savvy main­land tourists. In­stead, lo­cal con­sumers are hit­ting the road to em­brace the new tech­nol­ogy, which could boost the mo­men­tums of the city’s dig­i­tal pay­ment plat­forms,” said Lee Ying-ho, co-founder of Bei­jing-based e-pay­ment startup QFPay, a long-time partner with Ali­pay.

“Dig­i­tal pay­ment plat­forms are al­ways far more than dig­i­tal pay­ment it­self. If we just con­fine our­selves to pay­ment func­tions, is there any dif­fer­ence from in­te­grat­ing Oc­to­pus Card, with which Hong Kong has long taken pride for its once-pi­o­neer­ing ap­pli­ca­tion of e-money, into the smart­phones?” asked Lee.

For pay­ments, Hong Kong may re­main on track to catch up with its re­gional coun­ter­parts, while for a wealth of ad­di­tional func­tions like taxi hail­ing, or­der­ing take­aways, ticket-buy­ing and util­ity bill-pay­ing ser­vices that


Left: Three steps of pur­chas­ing set out in an un­manned con­ve­nience store in Zhong­shan. Right: Cus­tomers need to scan prod­ucts they want to buy at a cashier machine and pay through their smart­phones.

Zhu Yanxia,

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