【Overview of Electronic Payment Services in Hong Kong ③】”Tap & Go” and “WeChat Pay HK” originated from Hong Kong

In the third blog article of “Overview of Electronic Payment Services in Hong Kong”, we will introduce “Tap & Go” and “Octopus,” both electronic money services originating from Hong Kong. Both services are operated by major Hong Kong companies and are notable for being usable as both an app and a physical card.

“Tap & Go” Specializing in Household Expense Management

When thinking of electronic money, it is often perceived as a service that is completely app-based and only usable at stores that support that specific service. However, Tap & Go primarily functions as a credit card.

With a single Tap & Go account, users can access a physical credit card, QR codes, and a virtual credit card, offering a wide range of payment methods. The app itself functions as a virtual credit card for both Mastercard and UnionPay. If a store supports Mastercard or UnionPay’s NFC payments, users can utilize Tap & Go without needing a physical card, much like a debit card. Additionally, Tap & Go can be linked with the UnionPay app (for UnionPay cards only), Apple Pay, and Google Pay Wallet, further expanding its usability. This results in high coverage across businesses, stores, and online shops worldwide.

Focus on Expense Management
Tap & Go is available for users aged 11 and above, allowing parents to manage their children’s or family’s expenses. The app automatically categorizes expenditures into categories such as dining, shopping, and health, helping children learn financial management early. A single main account can manage up to five sub-accounts, with features such as transferring money to sub-accounts, checking their balance and transaction history, receiving notifications for sub-account transactions, and enabling online payment functions for sub-accounts.

Additionally, the “Share Bill” feature allows users to easily split receipt amounts and send reminders, making it very convenient for splitting bills. For P2P transfers, Tap & Go uses the FPS (Fast Payment System), allowing transfers even to recipients without a Tap & Go account, leveraging the widespread FPS system.

While other electronic money services implement cross-border transfers using their systems, Tap & Go’s cross-border transfers are done in partnership with Western Union. With Western Union, users can send money to over 200 banks and electronic money services worldwide, and recipients can receive cash at over 525,000 agent locations worldwide even without a local bank account.

Diverse Payment Methods in the Business Version
The business version, provided by HKT, is known as HKT Merchant Service.
HKT Merchant Service offers payment services tailored for FPS, POS systems supporting 16 payment methods, customized O2O solutions for various industries, and online payment services for online shops. The required documents include the applicant’s ID, the company’s monthly bank statement, and a Business Registration certificate, with registration completed in as little as 10 minutes.

“Octopus” The Pioneer in Global Electronic Money

Almost every Hong Kong resident possesses at least one Octopus card, boasting a remarkable 98% penetration rate.

Formally introduced in September 1997, right after Hong Kong’s return to China, Octopus was the first in the world to adopt Sony’s FeliCa, a contactless IC card technology. This pioneering move set a global precedent for electronic money systems. Leveraging this success, Octopus Cards Limited secured contracts to develop electronic money systems in the Netherlands, Changsha in China, Auckland in New Zealand, and Dubai in the UAE.

Initially limited to public transportation like buses, subways, and ferries, Octopus expanded its usability to include public services such as toll tunnels and parking fees, as well as retail and dining sectors, starting from 2000. According to Octopus Cards Limited, the daily transaction volume exceeds 15 million, with a transaction value surpassing HKD 300 million, making it indispensable to Hong Kong’s economy and daily life.

Contribution to Popularity through Various Forms and Uses
Even before the advent of cardless technology, Octopus was available in various forms besides cards, such as watches, keychains, plush toys, accessories, and extendable rods. The designs are diverse, featuring collaborations with Disney, Sanrio, Dragon Ball, Crayon Shin-chan, and Magical Angel Creamy Mami, allowing users to choose based on personal preference.

While rental cards and tourist cards can be used without submitting identification, personal cards record the holder’s name, photo (if provided), age, and address. Therefore, in addition to payments, they can be used as security keys for office buildings and residences, student attendance cards for educational institutions, and employee attendance records for companies.

The app version offers features such as automatic expense categorization, physical card recharge, usage as a virtual credit card for Mastercard and UnionPay, P2P transfers, and the purchase of transit passes.

Business Version App for More Convenient Payments
The business version app of Octopus, Octopus for Business, allows transactions using both physical cards and Octopus QR codes. If the smartphone has NFC functionality, there is no need to install a separate reader; the smartphone itself can function as a conventional reader. If using a reader, the latest Octopus Mobile POS is smaller and lighter than traditional readers. It can pair with Android or iOS devices installed with Octopus for Business via Bluetooth for transactions.

To apply, you need the last three months’ corporate account monthly statements and a Business Registration certificate (additional documents like an Electronic Extract may be required depending on the business type). Once the process is completed, one Octopus Mobile POS is provided free of charge.

The app is divided into “Owner Mode” and “Staff Mode.” Staff Mode includes basic functions necessary for daily operations, such as transaction history inquiries. Owner Mode includes additional management functions, such as account management and transferring sales to a bank account. Transfers to a bank account use the FPS system and can be set to occur automatically every month or week, minimizing manual management and transfer effort. Additionally, transaction histories and sales reports can be sent via email.

Summary

The advantage of using these electronic money services operated by major Hong Kong companies is the reassurance of data privacy, high adoption rates among businesses and users, and robust support for local daily life. The long history of these services also provides a high level of trust among Hong Kong residents.

Comparing the two services introduced, Tap & Go offers features useful for managing expenses and sub-account permissions, making it particularly suitable for families. Its cross-border remittance service, in partnership with Western Union, allows cash pickup at over 525,000 agents worldwide, making cross-border transfers convenient and user-friendly. The business-oriented HKT Merchant Service offers a variety of payment methods, including FPS, POS systems, and online payment services, catering to diverse business needs.

On the other hand, Octopus’s high local adoption rate makes it easy for individuals to use in daily life and helps strengthen business operations for companies in the food and retail sectors in Hong Kong. Besides payments, Octopus can be used as a security key, attendance card for educational institutions, and company attendance records, among other applications. For businesses, the combination of the compact and lightweight mobile POS and smartphone streamlines the payment process. The automatic bank transfer feature using the FPS system also reduces manual management for businesses.