Cash machine takes digital leap

Money Glitz | Bonnie Chen 19 Jun 2017

Automated Teller Machines will likely carry out one-stop banking services in the future including banking transactions, loan applications, submission of documents, and talking to the automatic teller in addition to cash withdrawals, reveals JETCO chief executive, Angus Choi Ping-chung.

Besides, the more than 2,000 JETCO ATM machines used by 14 banks in Hong Kong would be revamped gradually by first introducing touchscreens and then turning into small virtual teller machines.

By integrating ATM services with mobile phones, Choi wants to achieve a cardless state. "Once you get the PIN number, you will be able to get cash from the ATM," says Choi.

He says JETCO, established by five banks in 1982, has been switching from its core ATM business to a fintech platform that offers simple, secure, and timely services to banks.

The former banker stresses JETCO aims to offer convenience to customers of banks and help lenders to save costs.

"Should the ATM be able to offer more services, banks can save manpower and have fewer branches. This is especially useful when we are talking about financial inclusion to offer banking services to people having difficulties accessing banks," says Choi, adding many countries have been using robots.

Also, more smart functions could be offered by ATM machines for banks such as advice on how much banknotes should be placed as well as the ability to differentiate fake notes from genuine ones. "But it may take some time to achieve with the variety of banknotes we have."

The company launched JETCO Pay P2P mobile fund transfer last year. This allows customers of participating banks to transfer money to each other's account directly via mobile phones.

While the current service only allows one-to-one payment, Choi reveals a new service 'Request for Payment' will be launched in the fourth quarter that will facilitate bill splitting among friends. He adds the service will also be useful to those not attached to any organization to receive payments. They would include private tutors and swimming coaches, who need to collect fees.

The company hopes to launch a peer-to-merchant platform in the first half next year. The service will allow merchants to receive payments by using QR codes, while customers can pay directly from bank accounts via their mobile phones.

"Payments settled by credit cards, cheques, and cash incur costs to merchants. We expect property management companies, firms that manage car parks, and food stalls to use the service."

He hopes 14 banks, compared with just seven now, will be able to offer JETCO Pay P2P by the end of this year. Citi is the latest one to offer the service.

On average, the transaction size is near HK$500 compared with HK$300 in the beginning when the service was launched last year. The maximum allowed for each P2P fund transfer is HK$5,000.

With more banks joining the P2P platform and the rising number of e-banking customers, he expects the transaction size and volume to rise.

Although JETCO has found that 76 percent of people aged between 18-45 have used mobile payment services, Choi notes that many still have worries and stick to using cash and credit cards.

"Mobile phones are more secure than credit cards. If you have lost your phone, the JETCO Pay service will be disabled and you can download the app again to your new phone," Choi explains.

He assures that mobile payments are secure. There will be biometric authentication such as fingerprints or voice as the first layer, followed by a mobile PIN.

"We hope banks can directly handle a transaction instead of having third- party payment. Once business goes to a third party then your customer will be gone," Choi says.

"Banks to a large extent rely on credit cards, which incur heavy costs as there are charges from credit card companies. We want to strengthen the function of debit card, allowing payment to be directly deducted from bank accounts. Not only does it help reduce banks' costs but also lower individual's credit risks as personal money in the bank account is used."

Debit cards are popular in other markets but not in the SAR. "This is because banks in Hong Kong have been too generous in offering gifts and various promotions to credit card customers, but I hope that will change."

Again, Choi says using credit cards to top up Stored Value Facilities such as the Octopus card also involves costs. As such, JETCO has talked to SVF service providers to offer a top-up service. Choi says the response is positive, but JETCO only acts as a platform and it is deal between banks and the SVFs.

Also, he hopes to standardize services including ATM and payment QR codes among member banks.

"Should we offer more standardized services, that will help us develop cross- border business. We ultimately hope Hong Kong people can use mobile phones for payment in Greater China region. Our target is to have minimal use of cash and cheques."

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