PayPal, Octopus Heat Up Battle for Mobile Wallets

Two payment rivals are joining hands to make online shopping in Hong Kong seamless.

Recently, PayPal Hong Kong Limited (PayPal) and Octopus Cards Limited (OCL) unveiled a new mobile top-up service. It connects Octopus O! ePay users with PayPal's 19 million global merchants. By July 31, 2018 O! ePay users will also be able to top up using PayPal.

The announcement targets recent incursions by Alipay and WeChat Pay into the mobile wallets of Hong Kong consumers.

O! ePay was Octopus' response to the Chinese online wallets, while it tries to maintain its payment card dominance with the physical Octopus card that most Hong Kong residents use for transportation and micropayments. However, adoption is slow as there are no clear alignments between O! ePay and the physical card, like replacing the physical card with the mobile wallet.

PayPal is facing similar issues as it tries to remain the dominant payment gateway for businesses and consumers while fighting off incursions from rival payment solutions.

The tie-up allows Hong Kong shoppers to pay and top-up easily, while paying for services and products from businesses that already use PayPal. Effectively, the collaboration elevates O! ePay into a global payment solution while giving PayPal access to Hong Kong high-spending shoppers. 

“We are excited to bring the Octopus O! ePay and PayPal joint services to the Hong Kong market, which allows millions of consumers to more fully participate in the global digital economy,” William Ip, Director, Large Enterprise and Marketplace, PayPal Hong Kong, Korea and Taiwan said in a press release.

“We are thrilled to partner with PayPal to enable Octopus O! ePay Plus and Pro customers to top up their PayPal accounts and shop online at any of the millions of local and international merchants in PayPal’s network, thereby allowing Hong Kong consumers to enjoy more convenient and secure international shopping experiences,” Sunny Cheung, Chief Executive Officer of OCL added.

The announcement comes at a time when consumers demand convenient and seamless payment. A Capgemini and BNP Paribas: World Payments Report 2017 forecasted global digital payments to grow by an average of 10.9% in the next two years. Statista’s eCommerce Market Report projected Hong Kong’s eCommerce market to top USD 5.8 billion (HKD 45.2 billion) by 2022.

To drive buy-in, PayPal and OCL will offer an HKD 50 rebate to consumers who top up HKD 200 or above from their Octopus O! ePay Plus or Pro accounts to their PayPal accounts through the Octopus App in a single transaction. The offer is valid from 26 June to 31 July 2018 and is limited to the first 5,000 eligible Octopus O! ePay customers.