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Visitors to the Hong Kong Brands and Products Shopping Expo, at Asia World Expo, make purchases with their digital shopping vouchers on August 7. Photo: Winson Wong
Opinion
Adam Au
Adam Au

Why e-voucher scheme is a perfect gateway for Hong Kong to embrace digital payments

  • Hong Kong can no longer sideline digital payments or its associated technology while the global payment landscape develops by leaps and bounds
  • The mainland has been reimagining the concept of money for years, and it is time for us to join in
The recent HK$5,000 (US$640) shopping voucher scheme introduced by the Hong Kong government has sent the public on a temporary spending spree.
Having rejected another cash handout, the government’s electronic voucher plan was conceived to stimulate the local economy. On the surface, it has worked.
Unlike other economic policies that take time to show their effects, distributing vouchers is normally a quick-fix fiscal policy. During the global financial crisis in 2008, cities such as Chengdu and Hangzhou gave out prepaid vouchers to their citizens to ramp up consumption.

Some argue that doling out cash provides greater relief to hard-hit, low-income communities, but there is cultural idiosyncrasy at play: Chinese people tend to save, which means giving out cash might not produce the desired rise in consumption.

There is no point bickering about past policy. We should focus on how we can make the best use of the spending surge initiated by the voucher plan.

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Hong Kong consumer watchdog: be careful about purchases through e-consumption voucher scheme

Hong Kong consumer watchdog: be careful about purchases through e-consumption voucher scheme
Digital payments are more prevalent than ever as they benefit both businesses and consumers. In China, digital cashless payment is so common that it has prompted the central bank to ban businesses from refusing cash payments.

The e-voucher initiative is a perfect way for the Hong Kong government to transition to digital payments. Touted as “Asia’s world city”, Hong Kong can no longer sideline digital payments and its associated technology.

Hong Kong was one of the pioneers of cashless payment systems with the Octopus card in 1997. Since then, the global payment landscape has developed by leaps and bounds while digital uptake in Hong Kong has been slow.
For example, the lack of digital payment options in taxis, wet markets and local cha chaan teng perpetuates the notion that cash is still king in the city. This ingrained cash culture, a population averse to new digital payment methods and fears over privacy and security issues are major barriers to a cashless society.
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Yet, at the start of the Covid-19 pandemic, touchless payment options were sought out in the name of safety. To continue cashless payments, Hong Kong must capitalise on the roll-out of the shopping voucher scheme, which has been embraced by the population.

The government could begin by providing subsidies to marketplace vendors, taxi drivers and cafe owners to install QR code scanning machines.

Once the public further warms to the idea of a cashless system, that could inspire other payment platforms, to enable the proliferation of smart technologies. The expansion of the “internet of things” gives companies the chance to use a diverse ecosystem of internet-enabled devices.

For example, car users can be encouraged to shift to cashless payment platforms. From petrol stations and congestion pricing to parking, in-vehicle systems will help vehicles emerge as all-inclusive payment processing platforms. Such systems could also uncover defective components and schedule maintenance automatically, potentially reducing traffic accidents and cutting emissions.

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In the grand scheme of things, Hong Kong’s promotion of contactless payments will also deepen integration with the mainland. Beyond the ubiquity of cashless payments, China is on the verge of launching the world’s first centralised digital currency.
If Hong Kong wishes to jump aboard the technological bandwagon, we must start by changing our cash culture. With cross-border renminbi transactions growing year on year, Hong Kong could play an important role in the launch of the digital currency. The first step is to build up momentum to become truly cashless.

With data breaches occurring on a regular basis, some people will always be sceptical of the technology’s security. On one hand, people prefer the convenience of not carrying cash and the seamless exchange of funds. On the other, the automatic nature of transfers can cause them to feel they are no longer in control of the process.

As such, technological advancement itself will not necessarily lead to public acceptance. Digital payments’ convenience will only be widely accepted with a combination of directness, efficiency and security. Mainland China reimagined the concept of money many years ago. It’s time we joined in.

Adam Au is the head of legal at a Hong Kong-based health care group

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