Automated Payment over the Counter– A study of Alipay, WeChat Wallet and Octopus currently used in Mainland China and Hong Kong

Abstract

Gone are the days when cash, bank order, cheque and VISA cards are being used in department stores, supermarkets, etc. Many of us have witnessed the growing use of electronic payments (via the entering into electronic contracts) in virtual and physical shopping outlets.

This article attempts to discuss, in general, Alipay, WeChat Wallet and Octopus (“the three devices”) as electronic platforms, their inceptions, the circumstances under which they were developed, the pros and the cons of such devices in the East. Hopefully, this article may serve as a reference point that may contribute to the further development of electronic (automated) payments in the West in the near future.

WeChat kicked off as a communication APP, similar to WhatsApp which subsequently expanded its scope of operation, to include, inter alia, a Wallet function. WeChat’s Wallet function and AliPay create QR codes on the phone’s screen to be scanned by the producer/service provider’s scanners. All transaction data, including the names of the supplier and customer, the product/service consumed, the amount of payment, is sent immediately via the service provider (which is an intermediate party) to AliPay or WeChat’s central computers. Therefore, these two devices rely on a smooth and speedy transmission of data and the efficiency of the central computers of AliPay or WeChat. Octopus, on the other hand, uses a physical magnetic data storage card commuting on the Mass Transaction Railway (“MTR”) in Hong Kong. An Octopus card user charges his card and the amount of travelling expense is deducted therefrom upon his exiting the gateway of the MTR station. Further on, the Octopus has evolved to becoming a value card that allows its user to purchase items from 7-11 and other retail outlets with additional functions. To date, the maximum value stored is HK$1,000.

The authors wish to present a general picture of the current working of the three devices and focus on such use, application and the drawbacks. If space and time allow, we wish to draw a comparison between the different key working systems currently used in Asia, Europe (in particular, England), USA and Canada.

One must not, and cannot, in the outset postulate that there is a perfect system that can fit us all, nor can one deny that it may be possible to draw up some common denominators that are being shared by the more popular systems.