Since their introduction in December 2015, e-cheques have been positioned as a modern solution to the age-old practice of cheque payments in Hong Kong. Designed to streamline transactions by removing the need for physical paperwork, e-cheques promised enhanced efficiency and cost savings for both individuals and businesses. However, despite these advantages, e-cheques have yet to achieve widespread acceptance and remain a niche option in the local payment ecosystem. As of September 2024, only six banks continue to offer e-cheque issuing services, further diminishing their accessibility and attractiveness compared to other payment methods. This article delves into the factors contributing to the limited adoption of e-cheques in Hong Kong.
1. Strong Competition from Alternative Payment Methods
The rise of modern payment methods in Hong Kong has made e-cheques largely redundant. The city’s payment landscape is dominated by faster, more convenient solutions such as:
- Faster Payment System (FPS): Instant, free, and widely accessible for bank-to-bank or bank-to-e-wallet transfers using mobile numbers, email addresses, or QR codes. FPS has gained massive popularity since its launch in 2018.
- E-wallets (e.g., PayMe, AlipayHK, WeChat Pay): These apps provide real-time transactions with user-friendly interfaces, offering simplicity for both businesses and consumers.
- Credit Cards and Contactless Payments: Tap-and-go options, including Visa payWave or Mastercard Contactless, have taken off due to their speed and widespread adoption in retail.
Given the strong presence of these options, e-cheques lack a unique advantage that would compel businesses or individuals to switch from their existing payment methods.
2. Slow Processing Time
One of the most significant drawbacks of e-cheques is the processing time. While e-cheques save users the effort of physically delivering a cheque, the clearing process remains similar to traditional cheques, taking up to 2-3 business days. In contrast, FPS, bank transfers, and e-wallet transactions are instant or completed within minutes. This delay makes e-cheques less appealing in an increasingly time-sensitive business environment.
3. Complexity in Usage
E-cheques brought additional steps into the payment process, which proved to be barriers for users accustomed to faster and simpler options. To issue an e-cheque, users must log into their bank’s e-banking platform, generate the e-cheque, download the cheque in PDF format, and send it via email or other messaging platforms to the recipient. The recipient then must access their email, download the e-cheque file, and deposit the e-cheque through their bank portal.
Compared to entering a recipient’s mobile number in FPS or completing a tap-to-pay transaction with a smartphone, this process is lengthy and inconvenient. Many users, particularly those less tech-savvy or pressed for time, are unwilling to take these additional steps.
4. Dependence on Internet Banking
E-cheques are heavily reliant on internet banking platforms, which require users to have both access and familiarity with digital banking systems. While internet banking adoption is high in Hong Kong, customers are often hesitant to shift to new processes outside their established behaviors.
In industries or demographics where people are accustomed to traditional cheques or face-to-face transactions, the transition to e-cheques feels unnecessary.
Conclusion
E-cheques, while innovative in theory, have failed to carve out a strong position in Hong Kong’s payment landscape. Their slow processing times, complex workflows, and redundancy in the face of faster alternatives like FPS and e-wallets have hindered adoption. Unless stakeholders address these issues and position e-cheques as a unique, value-added solution, they are unlikely to gain popularity in an increasingly digital-first world.
AUTHOR
WINSON KWOK
Winson Kwok is a visionary co-founder of Corporate Hub, a platform that empowers entrepreneurs and startups with his expertise in entrepreneurship, economics, and business development. He has a proven track record of helping entrepreneurs achieve their business goals and overcome their challenges. He is driven by his mission to create a global impact by delivering value to the entrepreneurial community.