Story, graphs, timeline by Mark and Terrence
“Hey, how much is it for lunch today”, “Umm, can you pay for me first, I am running out of cash, I will pay you back through the app later.”. Cashless payment is more prominent than ever, it’s everywhere nowadays, e-wallet, online payment, you name it. With big players such as HSBC also being part of the game, releasing its P2P payment service platform PayMe, it is hard to deny that the cashless payment trend will not be fading out any time soon. But why is cashless payment in the form of mobile payment such a popular trend recently?
Before entering the age of mobile payment, the forms of digital payment can be traced back to years ago. Here is a quick glance on the evolutionary history of digital payment method.
As of August 2017, it is recorded that the top 10 leading mobile payment platforms worldwide add up to over 1.4 billion users globally. WeChat Pay and Alipay, as the top 2 mobile payment platforms alone, already constitute of 1 billion users by themselves. The massive user base shows how the mobile payment ecosystem is as vital as ever.
With this financial trend of disruption becoming more and more imminent, stakeholders in Hong Kong are also trying to catch up with this upcoming trend. In February 2017, HSBC launched its P2P payment service in Hong Kong, it allows HK users to transfer money with one another through the mobile app that is connected to their desired credit cards or bank accounts. PayMe have reached over 1 million active users in Hong Kong in July 2018. HSBC has put a lot of effort in the promotion of the PayMe services throughout Hong Kong, discounts with online payment through PayMe, cash rebate, HSBC even supported Clockenflap Hong Kong 2018, one of the largest music festivals in Hong Kong, making PayMe the only payment system supported in the festival area food, beverages and other experiences. PayMe is also a social platform-based platform, which means that the user will need first to bind the account with their Facebook account, and payments and transactions can be made via SMS, Whatsapp, Email and other social platforms.
“Mobile payment is honestly very convenient, sometimes I go out without bringing any cash with me, and I won’t be worried at all.” said Janice, a high school student “Mobile payment also makes it easier for me to shop online as well, with all my accounts in one place, I feel like I can do so many things with my phone”. John, a 32-year-old technician, who also uses mobile payment on a daily basis, shares his thoughts on mobile payment, “I think that mobile payment is popular because the same problems you have with cash will not happen when you use mobile payment systems, as transactions and payments are so simple and social circle based, things are quite straightforward.”
With all the promotion going on in Hong Kong, it seems like big players like HSBC are really trying to make mobile payment something everyone wants to take part in, but are these promotion tactics really working? Are people really getting what they are trying to deliver? In late July 2018, the Internet Society Hong Kong conducted an online survey in late July, which successfully collected 1,200 responses from local residents ranged in age from 18 to 65 that worked in a variety of industry sectors. It is suggested that 74% of the respondents believe mobile payment is the trend and over 84% of the respondents have used mobile payment before. More importantly, it is stated that 93% of the respondents aged between 18-25 have used mobile payment before. But is it really the advertisement and the discounts that are drawing more and more people into this whole new ecosystem. The social effects of the usage of mobile payment are often overlooked, but in fact, it takes quite a significant role in affecting people’s attitude towards mobile payment.
“I knew about mobile payment methods quite a while ago, to be honest, but I only got into using it after seeing my hallmates using it when we were out for food after a floor-game.” Said Sarah, a university student who lives in a residential hall and only started using mobile payment 3 months ago, “I was with another 2 girls, we were about to return to the hall after grabbing a bite, but I forgot that I had no cash with me.”. “My friend asked me if I have this app called PayMe, she said I can just pay her back through the app.” “I was so shocked at that moment, how is it so easy?” “but she just told me ‘yeah, it’s quite simple’ “. David, a white-collar worker, had similar experience, “I work in a Chinese firm and a majority of my colleagues are from China, at the end of my first unofficial lunch with my team, I am surprised that no one was looking through their wallets for money, the team head just scanned the QR code and paid for the whole team, and other colleagues send the money back to him through WeChat. I attempted to pay him back in cash, but he refused to take the money and insisted me on paying him through Wechat. I asked him why and he only said that it is easier to manage his cash that way.”
Peer pressure is often overlooked as a legitimate way of promotion when it comes to payment systems. Like credit cards, phones, shoes, and many other goods, people care about fitting in, doing similar things and staying relevant. It is the same for mobile payment platforms, it is essential to know how to do things the way like your colleagues, or your friends, you try your best not to be the odd one out. This peer pressure phenomenon explains why mobile payment is such a relevant topic for those of the younger age groups, they are more tech-savvy, close to the trends and are very aware to what others think about the way the dress, act and even, pay. What you pay for and how you pay for it, is all part of a lifestyle, after all.
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However, are people conscious about their decisions switching over to cashless mobile payment methods, though, while technology continues to advance, people are also exposed to much greater cyber threats. Criminal activities in cyberspaces are becoming more and more significant. It is reported that cybercrimes are the 2nd most reported crimes globally in 2016. While people are enjoying the increasing convenience provided by the improving mobile payment platforms, are people genuinely aware of the risks that may be underneath these applications that they are currently using?
In China, a man in Foshan was arrested for pocketing 900,000 RMB in 2017 through QR code frauds, he allegedly replaced legitimate QR codes created by merchants for mobile payment methods with fake ones that embedded viruses programmed to steal personal information of consumers, according to the SCMP. In the case of China, the sudden boom of mobile payment also saw the mass implementation of QR codes across the country for faster transactions and exchange of information, and for security reasons, many of these mobile payment methods also require the user to input various types of personal information for the purpose of verification. The case above is just a small glimpse of the broader implications of how the binding of a basket of personal information with one single mobile payment app may undermine the user’s privacy and information security. PayMe, in Hong Kong, also experienced similar security breaches, where 20 accounts were illegally accessed in November 2018, and HK$100,000 was involved.
“We don’t really have a choice quite frankly, in here (mainland China) we all use mobile payment platforms because it seems like most shops prefer these methods and that it is just so convenient.” Xiaojuan, a university student from Yunan currently studying in Hong Kong told us, “some of us are aware that a lot of our information is stored in these applications and that there are plenty of issues regarding the security issues, privacy, surveillance and more, but we don’t think it will really stop us from using these applications because it is simply something you can’t really go back from.”
Quite frankly, data security breaches, frauds and information leakages are never new problems in the scene, in years before, many companies were exposed to selling customer information and data to third party companies. But these cases are not really up to the users to decide whether they want their data to be accessed or not. But with the shift in trends of how stakeholders provide these financial services, in some ways, users have a bigger say in deciding whether or not they want to submit their personal information to these companies in exchange for a platform that will give them more convenient access to various activities. Are people truly aware of the trade they currently have? Privacy and information, in exchange for convenience.
All in all, while these platforms are becoming more and more dominant and are on the verge of replacing traditional currencies, people didn’t really stop and think before they start using these platforms and to enjoy the conveniences provided by these platforms, however, as forgotten by most people, personal accounts and business data are in fact the most critical assets in mobile payment because accounts are the foundation to perform payment transactions. There is nothing detrimental to the use of mobile payment, by while people are at it, they should really at least have an awareness of what kind of information they are submitting to these applications and whether this personal information actually matters. On the other hand, perhaps these mobile payment service providers should also work harder in providing more reliable services, increase security efforts and perhaps more transparency on how their corporations are handling user privacy and information.
Whether it is cash, octopus, or PayMe, you can’t really change the trend on what people use, just like clothes, but at least know why you use it, and what the cost is.