Banks have reason to fear as Alipay and WeChat Pay continues to expand their foothold.
Bloomberg reports that the success of China’s mobile payments giants Alipay and WeChat Pay in winning the patronage of Hong Kong’s tech savvy population can easily determine the growing role played by non-banking players in the provision of banking services.
“It’s going to be a battleground here,” said James Lloyd, a Hong Kong-based fintech specialist at consultancy EY. “The next 12 to 24 months, we’re going to see a very significant shake-up of the consumer payments and retail banking market.”
Alipay and WeChat Pay, which handled a whopping $5.9t in Mainland spending in Q4, is even threatening Hong Kong’s popular Octopus card which has already deployed a QR code for cabs and introduced an app for drivers to battle the apps’ growing clout.
The city’s de facto central bank is developing a digital-payment system called Faster Payment System, that will connect with banks and stored valued cards such as Octopus, letting people transfer Hong Kong dollars or China’s yuan with settlement in real time.
There’s precedent for financial firms to be nervous as Ant Financial moves to conquer the rest of Southeast Asia by tapping into the underbanked population of Thailand, Indonesia and the Philippines to offer services like money transfer and lending, and has even sought partnerships in the US to allow its expansion into America.
Here’s more from Bloomberg:
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