Hong Kong has one of the highest rates of mobile phone usage in the world and yet one of the lowest rates of payments made with smartphones in Asia.
ATM operator JETCO (Joint Electronic Teller Services Limited) hopes to change that with the launch of a smartphone app, which will allow peer-to-peer (P2P) mobile phone-based payment transfers using only a recipient’s mobile phone number.
The JETCO Pay P2P service will be offered by 12 partner banks and leverage the organisation’s existing inter-bank network to allow real-time transfers.
JETCO chief executive officer Angus Choi said the new service would offer convenience and security which will help boost mobile payments in Hong Kong.
“The smartphone penetration rate in Hong Kong is among the highest in the Asia-Pacific region at 87 per cent so there is great market potential for mobile payment and P2P fund transfer here,” Choi told BPAY Banter via email.
“Hong Kong consumers are very concerned about online and mobile payment security. JETCO Pay P2P meets the highest security standards with measures such as end-to-end encryption.”
Convenience, simplicity and security
JETCO is banking on three factors to boost acceptance of its mobile P2P service:
- Convenience – the service doesn’t need to be topped up with credit because it is linked directly to customer bank accounts.
- Ease of use – customers don’t need to know the recipient’s bank account number, just their mobile phone number, to make a transfer.
- Security – the service runs on the existing JETCO ATM platform which has proven to be reliable and safe over many years, relying on security features such as end-to-end encryption and a dynamic pin pad.
Hong Kong residents hold more than 16.6 million active mobile subscriptions according to government data, representing an average of more than two phones for each resident. However, consumers have been relatively slow to embrace some innovations which have taken off internationally, such as traditional bank and card scheme-offered NFC smartphone payments.
One possible reason is the massive popularity of the Octopus stored value card, which is accepted on all public transport services and by more than 15,000 retail outlets (including online and via NFC-enabled smartphones).
However, Choi says JETCO Pay P2P service offers a different service which will also appeal to customers.
“JETCO Pay P2P is different from Octopus and some other P2P services in town in the way that it is tied directly to the customer’s bank account, meaning that no top-up is required, and nearly anyone with a bank account can use the service.”
Rising demand for P2P mobile services
Mobile P2P transactions are growing rapidly and are expected to take up an increasing proportion of an estimated $US1 trillion in global P2P payments according to a report by BI Intelligence.
A number of P2P mobile services are being offered by start-ups around the world with emerging markets, where traditional financial infrastructure is often lacking, growing quickly. Telco Safaricom’s launch of mobile P2P system M-Pesa has quickly proven to be popular in Kenya while non-profit payment platform Stellar is using blockchain technology to allow low-cost bank transfers in some of the world’s poorest countries.
Major banks are also entering the sector as they stare down competition from new digital payment providers such as Google’s Android Pay and Apple Pay.
Australia’s big banks are building the New Payments Platform which will allow near real-time transfers and BPAY (the publisher of Banter) is building the first overlay service which will allow mobile-based P2P payments.
The JETCO Pay P2P fund transfer will be completed in real time if both the sender’s and recipient’s account is held with participating banks. While a number of banks have yet to join the service, their customers can still receive funds from bank customers using JETCO Pay P2P, although it will take about three days for them to receive those funds.
While 12 banks are set to use the system initially, the JETCO network includes more than 30 banks.
“JETCO is in talks with our other member banks,” Choi says. “We certainly hope that they will join the JETCO Pay P2P service but banks will decide individually on when and where they will allocate resources for such services.”
JETCO also has plans to add more services to its mobile platform including P2M (person to merchants) and bill payment services in the medium to long term.
This article represents the views and opinions of the author and do not necessarily reflect the opinions of BPAY.
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