AlipayHK, the local mobile payments partner of Ant Financial Services, said on Thursday that it has won a bid to provide QR code mobile payment solution for Hong Kong’s MTR railway system.
Commuters will have the option of entering MTR stations by linking their AlipayHK account to a separate MTR app, and scanning a QR code on their smartphones on the readers installed at the entry gates, according to the agreement signed between AlipayHK and MTR Corp.
The new QR code method is offered in addition to the use of Octopus cards, which has been the dominant payment method for mass transit railway transport in Hong Kong since 1997.
Users of the mainland Alipay wallet will also be able to link their accounts to the MTR app for payment, according to people familiar with the matter.
The new mobile payment system will be rolled out to 91 MTR stations across the city by mid-2020, AlipayHK said in a statement.
The MTR and Airport Express networks comprise a total of 93 stations and carry an average of about 5.8 million passenger trips per day. MTR Corp, which runs one of the most profitable metro systems in the world, had total revenue of HK$55.4 billion in 2017.
“AlipayHK is thrilled to have won the bid in being MTR’s QR Code payment system provider. Not only is this a recognition of AlipayHK’s technological stability, we feel confident QR code transit technology will be successfully expanded into more aspects,” said AlipayHK chief executive chief Jennifer Tan in the statement.
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AlipayHK is a joint venture between Hong Kong tycoon Li Ka-shing’s CK Hutchison Holdings conglomerate and Ant Financial, an affiliate of e-commerce giant Alibaba Group Holding. New York-listed Alibaba is the parent company of the South China Morning Post.
Tan said AlipayHK is also exploring more solutions for “smart mobility” when it comes to outbound travel, starting with travel destinations popular among Hongkongers.
The MTR did not disclose how many bidders were involved in the tender conducted in May.
Jeny Yeung, commercial director of MTR, said AlipayHK was elected from a number of bidders because of its technology and speed.
“We demand the provider must make sure the payment speed is similar to Octopus, which is the payment method for 90 per cent of the annual HK$1.7 billion in fare payments last year,” Yeung said. “We want the new move to offer more choice of payment options for passengers as there are an increasing number of people who like to use mobile payments.”
Yeung said about 1,000 gates would be installed with the QR code. AlipayHK said its QR code setup will support “dual offline solution”, so even if internet service is poor or lacking, transactions can be completed.
The exclusive right for AlipayHK will last for one year before three additional providers are added in middle of 2021. Yeung said the MTR has selected the other three providers from the same tender, but declined to identify them.
The announcement comes as Chinese mobile payment providers Ant Financial and Tencent Holdings’ WeChat Pay expand their battle for market share outside the mainland and into Hong Kong.
WeChat Pay HK had been the first to collaborate with the MTR on an alternative payment option to Octopus. From December last year, commuters and tourists were given the option to buy MTR tickets with their smartphones at selected stations.
Both AlipayHK and WeChat Pay HK have been offering incentives and discounts to users in the city to encourage adoption of their respective mobile payment services. Currently, various supermarkets and fast-food chains like McDonald’s already accept AlipayHK and WeChat Pay HK as mobile payment methods.
AlipayHK has also teamed up with two green minibus operators in Hong Kong, allowing passengers to pay the fare by scanning QR codes.
In September, Hong Kong’s WeChat Pay HK users were able to start paying for purchases at merchants on the mainland, settling the bills via Hong Kong dollar, making it the first Chinese mobile wallet to do so.
Elsewhere on the mainland, QR codes as a form of payment for railway rides are already commonplace in major cities including Beijing, Shanghai and Shenzhen. In Shanghai, commuters can opt to pay for their tickets via mobile wallets like Alipay and WeChat Pay after downloading an app. Beijingers enjoyed the same luxury when the service was launched in May this year.
Other cities accepting QR code payments for subway entrances include Hangzhou, where Alibaba is headquartered, as well as Guangzhou and Xi’an.
Aside from providing payment solutions for railways, both Alipay and WeChat Pay also offer similar solutions for consumers to pay their bus fares with Alipay or WeChat Pay on the mainland.
Additional reporting by Enoch Yiu