Dr. Winnie Tang, Honorary Professor, Department of Computer Science, University of Hong Kong
Hong Kong may be on the verge of following other countries to a cashless society. But first, concerns about privacy from fraudsters and government have to be addressed to ensure uptake. Barcelona may have the answer in a blockchain solution.
Two years ago, the Hong Kong Monetary Authority (HKMA) issued the first batch of licenses for stored-value payment services, facilitating sharing of bills among friends and paying for goods and services with small transactions. Since then, electronic payment by smartphone have developed rapidly. This year, one of the licensed companies announced that its number of customers has reached one million within 17 months.
FPS has arrived
The Faster Payment System launched by the HKMA last month has more advanced features: it breaks the barriers of payment transfer between banks and e-wallet systems, allowing cross-bank Hong Kong dollar payments to be made in real time. Payments payment can be in Hong Kong dollar or Renminbi. The system operates 24 hours a day, seven days a week. This retail payment system is undoubtedly a big step forward for Hong Kong.
This kind of electronic payment is convenient for people’s livelihood, it also collects valuable consumer behavioural data for commercial purposes, which can be used to analyze customer preference, improve services, and also fight corruption. All these advantages help us to develop our city in the direction of being a future smart city.
Keeping it clean
In fact, studies have confirmed that the prevalence of electronic payment is inversely proportional to the occurrence of corruption, that is, the more payment by electronic means, the fewer the occurrence of corruption. According to a study undertaken by Transparency International, the anti-corruption organization based in Berlin, Germany, and Euromonitor, a market research organization, more than 80% of transactions in the Nordic countries are cashless. The corruption rate there is relatively low, in part because all the payment transactions by electronic means are recorded and available for scrutiny.
But keep it private
However, to make electronic payment popular, it is important to address public concern regarding privacy and security issues.
In August this year, the Hong Kong Internet Registration Corporation announced the findings of its survey Mobile Payment: Digital Transformation from Customers to Merchants. It shows that 53% of the public have concerns about using mobile payment because of cybersecurity and personal privacy issues. In mid-September, the police announced that they have received complaints about alleged fraud regarding mobile payment. People were being cheated out of their money even though they have not used mobile payment. Facebook also reported that 50 million customer accounts were being exposed after an attack on its computer network.
All these cause reservations about payment by electronic means. Therefore, for the Faster Payment System to take off, it has to gain extensive support and confidence with proven security.
Struggling with personal data privacy and convenience is a daily issue for many people. Barcelona’s pilot scheme may be a solution to it.
Last year, Barcelona launched a program titled Blockchain-based Decentralised Data Infrastructure for Citizens to Own Their Data. The city’s Chief Technology and Digital Innovation Officer Francesca Bria emphasized that the program is to ensure that the citizens are in control of their own data, not the government.
The scheme allows citizens to decide which parts of their personal data they are comfortable and willing to share, with whom, and on what basis. The personal data includes their preference, location data, political views, social media data, etc. Their contributed data to the city can improve mobility, education and other services.
Personal data has its market value. If the public can control where their transaction data would be transmitted and for what purposes, their concern on personal privacy would be greatly reduced. This would certainly promote the acceptability and therefore popularity of electronic payment.
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