China’s central bank has approved the expansion of Ant Financial’s independent AlipayHK e-wallet throughout mainland China, allowing for visitors from Hong Kong to pay using their own currency.
Why it matters: AlipayHK beat Tencent’s WeChat HK to the punch as the first Hong Kong dollar-denominated mobile payment app across China and Hong Kong. It will allow Hong Kong visitors to mainland China to pay without the need to exchange currency or create bank accounts on the mainland.
- The expansion could help AlipayHK to boost adoption in the Hong Kong payments market, dominated by the Octopus contactless card.
- WeChat Pay HK’s coverage in China’s mainland is limited to certain merchants like ride-sharing platform Didi, lifestyle super app Meituan, and Walmart. The service is available nationwide at these vendors.
Details: The People’s Bank of China rubber-stamped the application last week and further details will be announced when the full service goes live, an Alipay spokesperson told TechNode on Monday.
- The e-wallet is operated by an independent local team under a joint venture between CK Hutchison Holdings and Ant Financial, and can be used by account holders from Hong Kong’s commercial lenders.
- AlipayHK has been available in nine neighboring cities in China’s Guangdong-Hong Kong-Macao Greater Bay Area, as well as in the Kyushu region of Japan since March.
- The service has more than 2 million users—roughly a quarter of Hong Kong’s 7.5 million residents—and is supported at 50,000 retail outlets across Hong Kong, according to a company statement in March.
Context: Cash and Octopus card remain the payment methods of choice among Hong Kong residents despite the rising use of mobile payments.
- Some 99% of respondents to a survey from Hong Kong Productivity Council regularly paid in cash in the first half of 2018, while 97% used Octopus.
- The use of mobile payments rose to 48% in the second half of the year from 20% in the first half, according to a follow-up survey during the second half of 2018. Changes to cash and Octopus card use were not mentioned.
- The survey was conducted independently of its sponsor, Alipay HK.