Hong Kong’s crowded electronic payments sector is about to get a new entrant: ICBC Asia intends to launch is app, EPay, in the third quarter. That is, assuming the bank secures the store-value facility (SVF) license from the Hong Kong Monetary Authority, which serves as a license for digital money transfers.
This follows on a deal to allow the bank’s customers in Hong Kong to connect their credit cards to Tencent’s WeChat messaging platform. ICBC Asia bankers say this let them test the waters, and now they’re ready to launch their own service.
EPay will link to an ICBC customer’s savings account or credit card account. It will enable peer-to-peer money transfers, as well payments to merchants (P2M).
The idea, according to people familiar with the strategy, is to win more local retail customers against the likes of AliPay, HSBC’s PayMe or Octopus’s O!ePay. To do so requires boosting functionality – for example, by aggregating it with the bank’s other online or app-based services, such as for credit ratings or security measures – and making it easier and convenient for people to use.
Hong Kong people care about data and security the most
The field is crowded, especially given Hong Kong’s small population of only about 8 million. The HKMA has already issued 16 SVF licenses, including to HSBC, Bank of Communications and Dah Sing Bank.
If ICBC Asia is approved, it would be the fourth bank providing e-payments. Tang Bin, manager of the bank’s technology department, was quoted by local media on.cc as saying ICBC Asia will also apply for a virtual banking license from the Hong Kong Monetary Authority; the first batch of applications to conduct online-only retail banking is due in August.
Hong Kong's busy e-payment space
ICBC is the world’s biggest bank, ranked by assets – but is it too late for it to carve a dent in Hong Kong’s busy e-payment space? Especially given the city’s reputation for preferring cash and credit cards?
“Hong Kong people care about data and security the most,” said Wilson Chow, China and Hong Kong TMT leader of PWC. He thinks the image of Hongkongers as indifferent to e-payments is rooted in the lack of value in early offerings. “If the app can really make life easier, people will use it,” he said – but the app that amasses the highest-quality user data is likely to provide the best customer experience.
“The industry,” Chow added, “will consolidate.”