Hong Kong has long been a city that relies heavily on cash, credit cards and octopus. When it was launched in 1997, it was only the second contactless payment system in the world after South Korea’s Upass.
However, the government’s announcement in 2021 that it will issue consumption vouchers through digital payment methods has led to a boom in the use of payment apps, with Chinese platforms such as Alipay HK and WeChat Pay HK emerging as clear leaders in this area.
The two apps were already popular among certain segments of society, including mainland Chinese students studying in Hong Kong or business owners who needed to work on the mainland. But now you can expect to see QR codes inviting you to pay with Alipay HK or WeChat Pay HK whenever you enter a restaurant in the city.
HKFP delved into public data released by the companies while speaking to young Hongkongers about their views on the apps to find out how these Chinese platforms have managed to succeed in a city where businesses with cross-border ties were once boycotted by pro-democracy groups. protesters.
The most popular application
The Hong Kong government introduced the first round of consumption vouchers – HK$5,000 for each eligible resident – to support the local economy amid the Covid-19 pandemic in 2021. Hong Kong residents had to collect their leaflets using four designated electronic payment platforms. : Alipay HK, WeChat Pay HK, Tap & Go and Octopus card.
Alipay HK, which is a subsidiary of Alipay of mainland Chinese multinational Alibaba Group, was founded in 2017 and is later held by an affiliate of Ant Group. For Hong Kong customers who do not have a bank account in mainland China, this is the only way to pay for goods on Taobao, China’s largest online shopping platform.
Launched in 2018, Tencent’s WeChat Pay HK is an e-wallet for Hong Kong users of the Chinese instant messaging app WeChat and supports cross-border transactions between Hong Kong and the mainland.
In 2022 and 2023, Alipay HK and WeChat Pay HK each accumulated five million registered users, according to Alipay HK and a Tencent spokesperson. This means that around 67 percent of the population has signed up to these platforms, although some users may be double-registered or tourists.
The main rival of Alipay HK and WeChat Pay HK is local digital wallet Tap & Go developed by Hong Kong Telecom, one of the city’s largest local telecommunications companies, in 2015. Instead of offering QR code payment services like Alipay HK and WeChat Pay HK, Tap & Go can be used as a virtual debit card that supports contactless transactions. However, the local payment method gained only about 3.6 million users in 2022, according to the annual results announcement.
With two more rounds of consumption vouchers issued in 2022 and 2023, two more payment instruments – Bank of China’s BoC Pay and HSBC’s PayMe – have been added to the list. They mostly support user-to-user transactions rather than user-to-merchant transactions. With much slower user growth, they pose little threat to the dominance of Chinese payment tools.
In contrast, Alipay HK and WeChat Pay HK have fully developed user-to-user and user-to-merchant payment services, and have won in terms of the number of merchants. As of February, Alipay HK claimed to cover 90 percent of Hong Kong businesses, according to Liang Yijian, Ant Financial Services’ head of international business in Hong Kong.
WeChat Pay HK said it has seen significant growth with a 30 percent annual increase in business transactions since becoming one of the payment tools of choice for consumer vouchers. It currently covers more than 150,000 merchants across Hong Kong, while Tap & Go’s website says it covers around 100,000 merchants. Other payment apps have not disclosed any information regarding merchant coverage.
A political issue?
The battle for popularity among Hong Kong payment apps has not always been straightforward.
As a young pro-democracy Hongkonger, 24-year-old Stephanie Ma made a rare decision among her peers – she chose Alipay HK as a tool to collect consumption vouchers.
I have friends who protested during 2019 and were previously reluctant to use Taobao, but have started using Alipay, Ma, who works in the fashion industry, told HKFP.
I know a lot of people said we shouldn’t use Chinese apps, but at the time I was tight on money and all I could think about was the best way to spend my ticket – the answer was to pick it up on Alipay, she said, adding that the app was accepted by most businesses and had fewer restrictions compared to the Octopus card.
Alipay HK has been expanding its services since the start of providing payment services on MTR, buses and minibuses in 2021, the same year the first consumer voucher was announced.
Alipay HK’s user base grew by more than 150 percent following the expansion of the service, and its CEO Venetia Lee said the number of small and medium-sized merchants accepting Alipay HK payments increased by 230 percent over the past two years. . The Chinese app was also the second most popular method to get a first consumption voucher after the Octopus card, according to Hong Kong CFO Paul Chan.
Ma told HKFP that she installed Alipay HK at university, but the app only began to seep into her daily life after the consumption voucher was issued.
I’ve been using it quite a lot since then, almost replacing my Octopus card to pay shipping fees and buy products offline, Ma said, adding that she wasn’t the only one to experience this change in her spending habits.
A survey by Hong Kong’s Lingnan University revealed that 63 percent of the 6,154 respondents surveyed had increased their use of digital wallets since the launch of the consumer voucher scheme.
Ma, who recently traveled to mainland China with a friend, was impressed by the app’s integration with the mainland’s QR code-based payment ecosystem. It’s crazy how convenient it was to use Alipay on the mainland — nobody uses cash there, she said.
But Ma said that as a self-proclaimed pro-democracy Hongkonger, she felt embarrassed to post about her use of Alipay on social media because it was against the norms of the “yellow economic circle” – a consumer movement that was a product of the 2019 protests.
Later, she found that some of her friends shared the same thoughts about using Alipay HK. “I’ll admit that I only used the app when a friend first brought it up,” she said.
Deliberate financial decision
The idea of the Yellow Economic Circle emerged three years ago when Hong Kong was gripped by mass street protests against a proposed change to the extradition law. Pro-democracy Hongkongers have rallied to support like-minded businesses and boycott those pro-government or those with ties to mainland China – Alipay HK and WeChat Pay HK among them.
According to parent company Tap & Gos, half of the app’s users were between the ages of 18 and 29. Neither Alipay HK nor WeChat Pay HK released such statistics.
HKFP has sought comment from Alipay HK, WeChat Pay HK and Tap & Go.
Kin, 27, a high school teacher with a keen interest in personal finance, was not among them. Instead, he opted for WeChat Pay HK to collect his consumption vouchers.
Despite being a recent addition to the payment app market, WeChat Pay HK has gained 5 million users in just five years. Most payment apps were launched one to three years before WeChat Pay HK, yet failed to gain as many users.
A significant factor behind its remarkable growth was – according to Kins – WeChat Pay HK simply offered the highest bonus.
Users who chose China’s digital wallet as a tool to collect vouchers could participate in an online lottery for cash bonuses. Kin won HK$400 in the lottery.
While Ma considered the use of Chinese payment apps an unspeakable secret, Kin said he saw it as a deliberate financial decision unrelated to any political stance.
I was transferring money from my credit cards to these apps and then transferring it back to my bank account. Through this practice, I can earn credit card rewards, but the app pays the handling fee for me, he explained.
According to Kino, Alipay HK and WeChat Pay HK offered more competitive discounts and had more stable systems than Tap & Go and Octopus cards, and he considered convenience and discounts to be the most important factors when choosing a payment app. He said he didn’t start using WeChat Pay more often after collecting the voucher.
Although Ma and Kin both agreed that they were not in the majority of young Hong Kong people, they thought it was clear that the trend for Chinese-style QR code-based payment methods was growing.
When asked how they would feel if Hong Kong were fully integrated into China’s payment ecosystem, Ma said that using Alipay HK made her more open to mainland China’s technology and culture. She added that people who used these apps began to focus less on current events and more on the financial benefits and entertainment offered by Chinese apps and social media such as Xiahongshu, a Chinese e-commerce platform that is gaining traction in Hong Kong. the market.
Still, the integration of China and Hong Kong does not come from the use of these apps, more like I don’t know what I can do as a Hongkonger who supports democracy anyway, Ma said, adding that she doesn’t see how boycotting Chinese apps will have a major impact on the city’s political development.
After all, the apps themselves are just neutral tools, she said.
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