Hong Kong and China plot cross-border e-money scheme
29 January 2010 | 9237 views | 0
The Hong Kong Monetary Authority is hatching a scheme to create a common cross-border e-money card and eftpos framework for transit and small value payments in the Pearl River Delta region, which comprises Hong Kong, Macau and nine municipalities of the Guangdong Province in the mainland of China.
The initial plans call for the creation of a 'two-in-one' card that would incorporate Hong Kong's Octopus chip and the Shenzen Tong transport card.
Speaking at a summit on creating a world class Pearl River delta metropolis HKMA chief Norman Chan says new cards comprising both chips and capable of handling multi-currency conversion across the border could be circulating within a year.
The next stage would entail the joint development of a common card reader for the acceptance of e-money in Shenzhen and Hong Kong.
While the Shenzen Tong and other similar cards across the border are mainly used in public transport with limited application in retail payments, Hong Kong's Octopus Card is extensively used, with approximately 56,000 readers covering 3000 service providers, including public transport and retail shops.
The value of transactions executed on the card exceeds HK$90 million per day. The proportion of non-transport Octopus card transactions has increased from six per cent in 2002 to 36% in 2009, while the value of non-transport transactions rose from HK$1.1 billion to HK$12.8 billion.
HKMA's Chan says mutual use and access of e-money is an important financial infrastructure for the future development of the region.
"The use of common card reader is a solution that can achieve mutual access and usage of e-money with scale," says Chan. "As it involves software development and replacing existing card readers, more time would be required for implementation."
He adds that "relevant parties" in Shenzen and Hong Kong have already started discussions on implementation.