Alibaba’s Ant Financial and Tencent have won digital wallet licenses in Hong Kong, reports Bloomberg.
This is considered a big and significant step in the two internet giants’ overseas expansion beyond their bases in China. The license helps the companies bounce back from an earlier setback to their growing payments businesses.
China’s central bank in July banned people who didn’t own a mainland bank card from storing money in Ant Financial’s Alipay or Tencent’s WeChat Pay accounts, depriving them of a large potential customer base of overseas Chinese. However, Hong Kong authority has now granted approval for users in the city to store money in digital wallets.
Zhejiang Ant Small & Micro Financial Services Group, which is trying to expand globally from India to Germany, is using Hong Kong as a test lab before building an overseas presence.
Credit card penetration is high in Hong Kong but people are wary of using plastic while shopping online because of safety concerns. Apart from cards, Hong Kong shoppers previously could buy pre-paid Alipay cards from convenience stores, convert their cash into yuan, then deposit in Chinese online accounts.
Digital wallets should be able to cement a place into Hong Kong shoppers’ lifestyles and purchasing habits, due to the general accelerated lifestyle of residents there.
A version of this appeared in Bloomberg on August 25. Read the full version here.