The Faster Payments System (FPS) introduced by the Hong Kong Monetary Authority on 17 September may be a game changer for the city's move towards becoming a cashless economy.
A few days after the launch, on 21 September, George Chou, Senior Manager, Financial Infrastructure Development Division at HKMA, visited the Chamber to give members an introduction to the new system.
As Chamber CEO Shirley Yuen said in her introduction, many people comment on how Hong Kong is lagging on e-payments. In the Mainland, even village shops will accept mobile transfers. Chou acknowledged this, noting that similar systems were already in use in other jurisdictions.
He explained two key elements of FPS. Firstly, he said, it is not a mobile app, as some people may believe. Instead, it is a core piece of financial infrastructure, like a road or railway, to enable faster payments.
Mobile payment systems and e-wallets are already in operation in Hong Kong. But the major change introduced by FPS is that it will enable person-to-person transfers across all systems. “There will be no more barriers between wallets,” Chou said.
Another benefit is that the funds will be available immediately, and the service is available around the clock. “Hong Kong is one of the few jurisdictions offering real-time transfers,” he said.
FPS is also free of charge, although the providers of e-wallet services may add their own charges, Chou added.
In practice, FPS can be used for person-to-person transfers of cash, Stored Value Facilities (SVF) top-up, and to pay merchants and businesses. Chou gave the examples of a group of friends splitting the bill for a meal, or paying for services from a tutor or air-conditioner cleaner.
One significant advantage of Hong Kong’s system – described by Chou as “something outstanding” – is that all is needed to make the transfer is a mobile number or email address, making it extremely fast and simple.
The system currently supports the Hong Kong dollar and the remnimbi, but it has the capacity to support multiple currencies. This facility may be introduced to FPS in the future if there is a market need.
Chou’s presentation was followed by a panel discussion with representatives from financial firms including traditional banks and start-ups. Alex Kong, CEO and Chairman of TNG Fintech Group; Kevin Kam, Chief Digital Officer at QFPay; Colet Ng, Deputy General Manager, BOC Credit Card (International); and Soh Fern Boey, Head of Global Transaction Services at DBS Hong Kong, discussed the e-payments ecosystem in Hong Kong and the region.
Soh said that being a latecomer is not necessarily a bad thing for Hong Kong. “First in the game doesn’t mean you get all the rewards,” she said, adding that we can learn from other jurisdictions.
The panel also discussed the possible reluctance to adopt e-payments among Hong Kong people, the competition within the sector, and the future development of the industry.