Four electronic payment providers were chosen by Hong Kong to operate the city’s HK$36 billion digital voucher scheme this summer, which is estimated to bring economic growth of 0.7 percentage points this year, Hong Kong’s Financial Secretary said recently.
The four providers each cover about 30,000 to 100,000 merchants in retail, food and beverage, and service industries in Hong Kong, the city’s Financial Secretary noted.
“When identifying the operators, the government has taken factors into consideration including the provider’s experience, popularity, and their coverage of merchants,” the FS said, adding that the four providers are the customary payment tools for people in Hong Kong.
A central registration system will be set up so that any qualified Hongkongers above 18 years old will be eligible to collect a HK$5,000 digital consumption voucher this summer, according to the official.
The total planned issuing scale – HK$36 billion – is expected to shore up Hong Kong’s economic growth by 0.7 percentage points; meanwhile, it will push small merchants to adopt electronic payment, he noted.
The Financial Secretary stated that in order to produce the best possible economic results, in addition to the fast containment of the coronavirus in Hong Kong, it is hoped that all of the payment providers and merchants in retail, food and beverage and other service sectors can promote the scheme actively, and even offer discounts across different sectors so that the electronic vouchers can see a multiplier effect, prop up the local economy and market.
The economic stimulation effect of issuing digital consumption vouchers is twice that of issuing cash according to the Chairman of the China Silk Road iValley Research Institute. In particular, it is effective in boosting tourism – any 10 yuan digital voucher can feed into 300 yuan of consumption.
He noted that over the past year, the consumption willingness of Hongkongers was severely restrained. As long as the SAR government, business sector, and especially the small and medium-sized enterprises (SMEs), can come up with methods to unleash the consumption potential, it will definitely help sales.
Hong Kong’s economy dived 6.1 per cent last year – the biggest annual contraction in history – as the coronavirus hit its tourism and consumption sectors.
When containment measures relax in the future, experts suggest that more Hongkongers spend in Hong Kong for the city’s ‘self-rescue’ instead of travelling to other cities. The Chairman added that the average number of times that Hongkongers travel abroad each year has hit 11.4 – the highest in the world.
In order to be back on track, Hong Kong could grasp the opportunities by actively getting involved in the Guangdong-Hong Kong-Macao Greater Bay Area, while the Chinese mainland sees brisk economic rebound, the expert stated.
According to an earlier article, Hong Kong’s finance chief unveiled a spending blueprint with fewer but more-targeted relief measures, including an unprecedented digital voucher scheme for residents to spur consumption, while forecasting a substantial recovery from the recession that could see economic growth of up to 5.5 per cent in the year ahead.
Presenting a budget focused on reviving the economy and easing the burden on a population struggling under the Covid-19 pandemic, the Financial Secretary had, on 24 February 2021, warned of a record deficit of HK$257.6 billion (US$33.14 billion) for the current fiscal year and more annual deficits ahead as he scaled down relief measures by a third.
Another report noted that the government’s electronic spending voucher scheme will hopefully promote e-payment in Hong Kong. Some believe the scheme will attract more small shops – especially stalls in wet markets – to install e-payment systems.
