(Yicai Global) Nov. 10 -- Alipay and WeChat Pay, the payment platforms of Tencent Holdings Ltd. [HK:0700] and Alibaba Group Holding Ltd. [NYSE:BABA], respectively, are working to go up against the Octopus card in Hong Kong.
The localized WeChat Pay HK and Alipay HK have boosted the popularity of mobile payments in Hong Kong. Following the introduction of Alipay HK's taxi payment system and 'cash-free streets' promotion, WeChat Pay HK announced upgraded functions on Oct. 31.
The Octopus card, a contactless smart card for making electronic payments in Hong Kong, started as a way to collect mass transit fares in 1997. Its scope has since expanded to convenience stores, supermarkets, fast-food restaurants and parking meters. Aside from using a physical card, consumers can make online and point-of-sale payments as well as peer-to-peer transfers with Octopus card services.
Alipay's operations in Hong Kong cover online and point-of-sale payments as well as P2P transfers, Ant Financial said.
The main business of WeChat Pay's Stored Value Facilities (SVF) license is for a stored value tool (wallet), a Tencent Financial insider said.
Alipay and WeChat have opened local wallets for Hong Kongers, but many of them have already become accustomed to the Octopus card.
The Octopus card will still exist, but Alipay, WeChat Pay and other means of payment will gradually expand their market share, which will attract more users to mobile phone wallets, said Li Honghan, a researcher with the Hubei Collaborative Innovation Center for Industrial Upgrading and Regional Finance.
Some of Alipay's attempts to scoop up market share in Hong Kong have yielded less than ideal results, Yuan Leiming, the vice president of Ant Financial Services Group -- the Alibaba affiliate that operates Alipay, previously told Yicai Global. Alipay focused on offering more differentiated services and providing merchants with credit, financial and insurance services this year.
The volume of the global non-cash business increased 11.2 percent from 2014 to 2015 with the closing of 433.1 billion deals.