The pandemic made mobile payments commonplace, but the Government was able to understand the trends and intervened decisively
It is true that Macau had been adopting mobile payments for at least three years before the pandemic hit, but everyone in the city knows how it was before and how it is now.
The government, through the Monetary Authority (AMCM), noticed the dynamics of the population and “has actively promoted the use of mobile payments in Macau”.
At the end of 2020, the number of mobile payment terminals installed and QR code signs presented at local merchants increased 87.9 per cent from a year earlier to 70,000. Meanwhile, the usage of local mobile payment tools also surged during the year, with the total number of transactions rising 3 times to 65.5 million and the total transaction value jumping 4 times to MOP6.33 billion, according to latest official data.
And it was in 2020 that decisive steps were taken towards what proved to be the most effective measure: the creation of the “Simple Pay” integrated scheme in the first quarter of 2021.
Upon the official launch of “Simple Pay”, merchants moved to accept all local QR code payment tools through a single terminal or a single QR code sign, “aiming to provide more convenient payment experiences for the public,” AMCM explained, “in line with the policy objectives of constructing a smart city and promoting the development of a digital economy.”
The coverage of the “Simple Pay” integrated payment service “has rapidly expanded” since its launch in the first quarter of 2021, “thanks to the proactive collaboration of the financial sector and the propelling of the general public.”
With 90 per cent of merchants in Macau upgraded to “Simple Pay” and 8 financial institutions coordinated, “mobile payment was driven to a new climax,” still according to AMCM.
The number and value of transactions over 2021 reached 190 million and MOP18.5 billion respectively. Both figures were equivalent to three times those of 2020.
“The e-Payment is well developing in Macau now, because government can catch up the opportunity,” stated Professor Alfred Wong, Faculty of Science and Technology, University of Macau.
“Since pandemic is affecting Macau’s economy, the government needed to provide funding support for residents. However, government was using the e-Payment to distribute the funding support. The Macau residents is well using to use e-Payment from low usage level to high usage level. This is the smart strategy by government,” Professor Wong told Macau Business.
“In developing modern finance, the AMCM continuously rolls out various financial infrastructure systems, enabling the offering of financial services that gradually permeate citizens’ daily lives,” like the Faster Payment System (FPS), that allows banks to provide instant small-amount interbank fund transfer service, and enhancing fund transfer and settlement efficiency between Macau and Hong Kong through the connection of the HKD real-time gross settlement systems.
Besides, banks in Macau have introduced various innovative services such as remote on-boarding, Smart Teller Machines (STM), online loan applications, online cross-border remittance, and cardless cash withdrawal services, etc. Insurance companies are also authorized to launch various online services.
“The AMCM will continue to facilitate financial institutions to explore the expansion of the integrated payment service into more daily life scenarios,” the Monetary Authority stated.
A profitable industry and another not so much
At end-2021, there were three authorised institutions engaging in payment services and/or merchant acquiring services in the MSAR, under the licences of “non-bank credit institutions” or “other financial institutions”. “With the gradual rebound in visitor arrivals during the year, and the launch of ‘Simple Pay’ leading to a significant increase in local mobile payment transactions, the industry turned a loss into a profit, with total operating profit jumping 95.4 per cent year-on-year,” AMCM reported.
On the other hand, the exchange business has suffered a lot from the effects of the pandemic: at end-2020, there were 11 authorized money changers operating in the MSAR.
Total assets of the sector hence declined by 31.8 per cent to MOP250 million. While business turnover and operating expenses dropped by 73.4 per cent and 43.4 per cent respectively during the year, the sector recorded a net loss of MOP31.1 million.
During 2021, Tong Lei Money Changer Limited ceased operations “due to its own development strategy”.
“Due to the pandemic, coupled with the popular application of mobile payments,” the industry’s currency exchange volume declined again, and total assets fell by 9.1 per cent to MOP230 million year-on-year.
While business turnover and operating expenses dropped by 20.9 per cent and 14.7 per cent respectively during 2021, the sector recorded a net loss of MOP34.2 million.
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Autor(en)/Author(s): João Paulo Meneses
Quelle/Source: Macau Business, 19.02.2023
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