Common local digital payment solutions for eCommerce: FPS, WeChat Pay HK and Alipay HK

Hong Kong eCommerce businesses are expanding their local and cross-border operations through a variety of digital payment options such as Faster Payment System (FPS), WeChat Pay HK, Alipay HK and more. As online payments and cashless transactions become the new standard, this article delves into the merchant fees and transaction limits of common digital payment platforms in Hong Kong. Additionally, it introduces Airwallex's all-in-one global payment service, which offers faster and more cost-effective solutions to enhance overall operational efficiency.

Overview of common digital payment options and local collection methods in Hong Kong

1. Faster Payment System (FPS)

FPS is a cross-bank instant payment system introduced by the Hong Kong Monetary Authority in 2018. It provides secure and convenient retail payment services to merchants and consumers 24/7. Currently, FPS support payments only in Hong Kong dollars and Chinese Yuan.

Merchants looking to integrate FPS for payment collection should reach out to banks and Stored Value Facility (SVF) operators that offer FPS services. Available options include printing QR codes on invoices, enabling QR code payments online and at points of sale, and utilising mobile apps. It's important to note that merchants can only receive payments into one bank or SVF account by linking it to an email address, phone number, or FPS ID.

2. WeChat Pay HK

WeChat Pay HK is a digital payment tool under Tencent that covers both online and offline merchants in Mainland China, Hong Kong, and Macau. Businesses can apply to become WeChat Pay HK merchants through two methods - through email, or apply through the "WeChat Pay HK QR Code" mini-program in the WeChat mobile app. Once approved, merchants can display their dedicated QR code in their stores to receive payments.

Customers can pay the Mainland China and Hong Kong merchant with Hong Kong credit cards, Hong Kong bank accounts, or WeChat Pay HK balance. There is no need for Chinese bank cards or Chinese mobile phone numbers, and the system automatically converts the transaction amount from Chinese yuan to Hong Kong dollars without any handling fees.

3. Alipay HK

AlipayHK has 3.3 million active users and 1.5 million registered users under the Consumption Voucher Scheme, and covers Alipay users in both Mainland China and Hong Kong. Once merchants have enabled AlipayHK, they can use the PayCode QR codes as a payment option on their websites or mobile app. Transaction fees vary depending on the services required by the merchant. Offline transaction fees can be as low as 0%, while online transaction fees are determined based on the specific services needed. Here is a list of documents generally required for merchant applications.

• Proof of business and company registration, such as valid Business Registration (BR) or Certification of Incorporation (CI)

• Bank account or account information, such as bank card/passbook copy, or bank statement from the past 3 months,

• Information on the business’s operation and products 

• If the company is an unlimited company, personal information of the legal person(s) is also required

Comparison of different local digital payment platforms

* Merchants needing to make payments or transfers under HK$1 million via FPS may be subject to fees imposed by the bank or SVF operator.

Which digital payment solution is best suited for growing online shops? 

Selecting the right digital payment and collection solutions that are tailored to their specific needs and target customer base is crucial for online stores. For businesses focusing on both local and Mainland China, FPS is ideal for larger or frequent transactions due to its low transaction fees and instant transfers. In contrast, WeChat Pay HK and Alipay HK are better suited for stores targeting Mainland China customers, as these familiar payment methods tend to attract them despite the associated transaction fees for merchants.

For businesses targeting both local and international customers, it is advisable to use credit cards and UnionPay for payment and collection. This strategy broadens the customer base but may come with higher transaction fees.

Moreover, third-party platforms like PayPal and Stripe primarily support online stores in expanding their overseas customer base. For instance, the all-in-one platform, Airwallex, provides secure and convenient payment and collection services (including FPS, WeChat Pay HK and Alipay HK) while eliminating currency exchange fees. Businesses can benefit from favourable exchange rates compared to traditional banks, thus reducing operational costs for cross-border transfers.

How is Airwallex streamlining payments for online shops?

Airwallex offers a suite of streamlined payment solutions designed to boost operational efficiency for businesses of all sizes, including eCommerce platforms, subscription services, online stores, and marketplaces. For instance, the Global Accounts accept payments in various currencies so businesses can avoid hefty currency conversion and transaction fees. Airwallex also supports over 160 local payment methods, such as FPS, WeChat Pay HK, Alipay HK, credit cards, bank transfers, Apple Pay, Google Pay, and more. This extensive range of options allows online stores to accommodate customer preferences, thereby enhancing the overall user experience.

Airwallex’s API integration

Airwallex offers seamless integration options through its Application Programming Interface (API), allowing businesses to easily collect customer payments. By choosing the right integration option, businesses can start receiving payments immediately. 

For instance, Airwallex provides pre-built plugins compatible with popular eCommerce platforms likeShopify, WooCommerce, and Magento. Furthermore, businesses can direct customers to an Airwallex-hosted payment page on their website to complete payments. Businesses can also leverage the Airwallex API to build a customer checkout flow directly in their backend or use the Software Development Kit (SDK) to accept payments within iOS or Android applications.

Is it safe to make payments and collections using Airwallex? Is Airwallex accredited and regulated? 

Airwallex is regulated by the Hong Kong Customs and Excise Department and holds a Money Service Operator (MSO) license (No. 16-09-01929). It also holds licenses from regulatory authorities in the United Kingdom, the United States, Australia and other regions, enabling secure and compliant global operations. User data is protected through multiple identity verification processes, and accounts are further secured with two-factor authentication.

Trusted by over 100,000 businesses worldwide, Airwallex serves notable clients like Slowood, a well-known brand in Hong Kong. Slowood leverages Airwallex's global collection services to seamlessly integrate with their Shopify eCommerce platform, overcoming the limitations of Shopify Payments which only support international payment methods. With Airwallex offering over 160+ local payment methods, including popular local options such as FPS, WeChat Pay HK, and Alipay HK, the checkout process is streamlined and convenient, resulting in a 36% increase in customer retention and a 50% rise in the use of local payment methods.

Additionally, Slowood utilises Airwallex's Multi-currency Account to pay international suppliers directly in USD, eliminating forced currency conversions and avoiding unnecessary and hidden costs. This approach significantly reduces the pressure of cost increases.

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FAQs

Which local collection method is best suited for online shops? 

The choice of digital payment should align with the nature of the online store and the geographic location of its target audience. For businesses catering primarily to local Hong Kong customers, FPS and bank transfers are good options. Conversely, if the goal is to attract Mainland China customers who favor e-wallets, Alipay HK or WeChat Pay HK would be the preferred options.

What are the account opening fees for Airwallex Business Accounts?

Airwallex offers Business Accounts without any account opening fees, maintenance charges or hidden charges. Businesses can quickly set up both local and foreign currency accounts within a minute.

What does Airwallex’s Global Account offer?

Airwallex's all-in-one Global Account allows businesses to accept over 160 payment methods across 180+ countries and regions. Businesses can collect one-time or recurring online payments from customers in their preferred currency and payment methods, and also settle payments with the same currency. With this service, businesses can eliminate currency conversion costs. Additionally, Airwallex offers built-in fraud detection and dispute management features to automatically identify suspicious transactions and reduce refund rates.

References/ Data sources:

For information related to Airwallex, please refer to the pages about Business Account, Payments and Pricing & fees.

Content related to FPS, WeChat Pay HK and Alipay HK is updated as of June 2024 according to information found from below sources and is for reference only. Please visit the relevant official website to obtain the latest information.

1. https://mp.weixin.qq.com/s/42NXGkP9inM0IxJNnIHXqA

2. https://unwire.hk/2024/04/02/wechatpay-hk-now-can-pay-with-hkd-in-china/life-tech/epayment/

3. https://fps.hkicl.com.hk/chi/fps/merchants/frequently_asked_questions.php

4. https://www.dbs.com.hk/iwov-resources/pdf/ratesfees/bank_charges_schedule_corporate_customers_oct_2021_zh.pdf

5. https://www.business.hsbc.com.hk/zh-hk/regulations/commercial-tariffs

6. https://www.kpay-group.com/zh-hk/blog/how-to-become-WeChat-Pay-merchant/

7. https://www.alipayhk.com/zh/merchants/setup-and-support/frequently-asked-questions/

8. https://fps.hkicl.com.hk/chi/fps/merchants/frequently_asked_questions.php