Despite a tough market where 14 million Octopus card and 1.7 million credit card transactions are made on a single day, major digital payment operators worldwide are losing no time to muscle in on this Asian financial center, making the city a red-hot payment battleground.
"The sheer size of the local market looks not lucrative at all. But companies crowd into the territory in a belief that if they could survive in Hong Kong's stringent regulatory environment, they could gain a footing in any part of the world," Hung reckoned.
"With so many market players joining the fray/vying for a share, the major issue facing local consumers is they are bombarded with too many choices," Chan said.
"All of a sudden, they are told to pay via NFC payments like Apple Pay, Samsung Pay and Android Pay, or third-party mobile and online payment platforms like WeChat Pay and Alipay, without much idea about how to choose," Chan noted. "Apart from that, contactless Octopus card and tap-and-go credit cards are also available. You must admit that the learning curve could be rather steep."
To bolster the city's ambition of becoming a world-class smart city over the next five years, the SAR government unveiled a smart city blueprint in December last year.
However, the hot-button issue of payment systems is listed under the domain of "Smart Living", rather than "Smart Economy".
"This may indicate that the concept of digital payment remains being viewed in a narrow perspective," Chan said.
Payment, Chan pointed out, lays the foundation for a wealth of next big things. It stands as the building blocks for disruptions such as crowd-funding, peer-to-peer lending, online insurance, initial coin offering and other promising financial technologies.
Dismissing the idea that Hong Kong lags behind technologically in a worldwide payment competition, Hung believed the major hurdle comes from its mentality, which restrains the financial hub from truly recognizing the huge potential of the payment technology.
"Basically, I don't think Hong Kong could make much difference in the business-to-customer payment market. Whether Hong Kong should bother to develop its own payment system is also a question open for discussion," Hung said. "But what's going on in the city's nascent digital payment market just reflects some deeply-rooted problems, which reminds me of the tough and bumpy ride that sharing economy is in for in the territory."
