HKMA tipped to regulate e-wallets

Business | Kevin Xu 11 Jun 2019

The Hong Kong Monetary Authority will launch measures to optimize the account structure and account opening process of stored value facilities, an HKMA spokesman said, after local media reported yesterday that the authority will require real-name verification on e-wallets in October next year.

The spokesman added the HKMA has consulted the market for suggestions, and will announce the measures after concrete plans are made.

Users without real-name registration could only gain access to limited services, including lowered top-up limits and restraints on the use of funds for shopping only, while new users have to register with identity validation, according to local media.

The SAR's de facto central bank ordered e-wallet operators to suspend auto transfers via the Faster Payment System to top up Octopus in October last year, after it received user complaints of missing funds totaling about HK$180,000.

HKMA deputy chief executive Arthur Yuen Kwok-hang said regulations would not hamper innovation, stressing that the authority would leave some room in policymaking.

The authority launched the Faster Payment System in September last year to enable the public to transfer funds across 21 major banks and 10 e-wallet operators on the same platform. The transaction amounts on the system has surpassed HK$400 billion and nine billion yuan (HK$10.18 billion), Yuen said.

He said nearly 60 percent of bank clients had e-banking accounts last year, and the number of such accounts in Hong Kong topped 14.3 million, compared to the only 40 percent of bank customers who had e-banking accounts in 2013.

Meanwhile, Yuen expected the eight companies with virtual bank licenses to offer services as soon as in six months time.

The regulator said it would closely monitor the operations of the virtual banks, including customer reactions and the impact of those services on the banking sector in general.

Smartphone maker Xiaomi (1810) said gaining the license was an important step for the internationalization of its business. Insight Fintech HK, a joint venture between Xiaomi and independent investment bank AMTD Group, was granted a virtual bank license last month, and is expected to launch services in the next six months.

Xiaomi co-founder Feng Hong told local media that Xiaomi has some experience in operating an internet bank, as it's the second largest shareholder of mainland internet bank, Sichuan Xinwang Bank.

Xiaomi's revenue from internet finance business grew 80.5 percent year-on-year in the fourth quarter of 2018.

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