A presentation to 150 retail business executives on behalf of the Association of Cloud and Mobile Computing Professionals at the PCCW conference room on 9 Oct 2015.

1. Emil Chan
Unleashing the O2O Business when the Local
Mobile Payment Services are Taking off
9 Oct 2015

6. Alibaba’s 11.11 Carnival in 2014
57B
500M
600M
217
24B

7. How about the performance of other Platforms?
O D 14
10 2
O 20 C
P O 487%

8. The Big 4 of eCommerce in China

9. Trend of Technology Lifecycle
Source: Bank 3.0

10. Core of Business Operations
Flow of
Goods
Flow of
Money
Flow of
Information

11. Are they 3rd Party Payment Agents?

12. Major 3rd Party Retail Payment Agents in
China and Hong Kong

13. Paul Volcker
The only thing
useful banks have
invented in 20
years is the ATM

14. Internet Thinking

15. Wool comes from the pig's back
One gets the benefit for free and the price is paid by someone else

16. Bigs can fly if they find where wind blows

17. Uber Everyone’s own Private Driver

18. Airbnb Welcome Home

19. Segway the leader in personal, green transportation

20. AliPay KFC

21. The Salt Merchant

22. Rent-Seeking
• Textile Quota
• Utility companies
• Taxi
• Tunnels
• Financial Services

23. FinTech

24. Banks move into the digital world

25. Digital World taking over banks

26. Types of Internet Finance
3 Party
Payment
P2P Lending Big Data
Finance
Crowd
Funding

27. FinTech Payment Innovation

28. Innovation of Electronic Retail Payment Systems
Year Innovation
1980 ETC
1982 JETCO
1985 EPS
1993 PPS
1996 RTGS
1997 Octopus

29. EPS Refill cancelled in 2007

30. The Innovation of Octopus in last 20 years
Year Innovation
1994 Proposed by MTRC
1997 Used on MTR, buses and ferries
2000 Accepted by 7-11
2006 Citybank issued Built-in Octopus Visa Cards
2010 Selling of Customer Database
2014 Support AliPay with Mobile App

31. HKMA’s roles on FinTech
As a facilitator
• E-bill presentment and payment platform
• E-cheque
• NFC Mobile payment

35. Flow of eCheck

36. The Project Schedule of eCheck
Major Milestone Start End
Public Consultation Jun 2012
System Development Mar 2014 May 2015
Internal Test Jun 2015 Sep 2015
Member Bank Test Aug 2015 Sep 2015
Simulation Test Sep 2015 Nov 2015
Soft Launch 12 Dec 2015
Public Launch 31 Mar 2016

37. HKMA’s roles on FinTech
As a regulator
• Proposed a regulatory regime for
Stored Value Facilities (SVFs) and
Retail Payment Systems (RPSs)

38. Licensing regime for SVF
• Propose to implement a licensing regime, covering device‐based (e.g. stored value
cards) and non‐device based (e.g. online stored value account) multipurpose SVF,
to ensure the safety and soundness of issuers, and protection of users’ float
• Issuing SVF without a licence will be a criminal offence
• No licence is required for single‐purpose SVF
• The Hong Kong Monetary Authority (“HKMA”) may exempt the following SVF from
applying for a licence
- SVF for use within, or within close proximity to, the issuer’s premises; or
- SVF for purchasing limited range of goods or services from a limited group of
goods
and services providers
• As licensed banks are already subject to regulation under BO, they are deemed to
be licensed to issue SVF

39. Designation regime for RPS
• Operate and provide retail payment services in Hong Kong;
or process Hong Kong dollar or other prescribed
currencies (e.g. RMB, USD)
• A RPS may be designated if any disruptions to the RPS
have implications to the monetary or financial stability of
Hong Kong; public confidence in payment systems or the
financial system of Hong Kong; or day-to-day commercial
activities in Hong Kong
• Potential Coverage include: Credit card schemes, Debit
card schemes, Merchant acquirers, Payment gateways

40. Objectives of the regulatory regime
• ensure the safety and soundness of the operation of SVF and
RPS in Hong Kong;
• ensure adequate protection and no misappropriation of float of
SVF;
• foster innovation in retail payment products and services in
Hong Kong by providing clarity in the legislation and a level
playing field for market participants; and
• maintain Hong Kong’s status as an international financial centre,
by putting the retail payment legislation on par with what other
major financial centres are pursuing.

41. Status of Legislation
• The Clearing and Settlement Systems (Amendment)
Bill 2015 gazetted on 23 January 2015
• The Bill was introduced into the Legislative Council
for first reading on February 4, 2015
• Bills Committee on Clearing and Settlement Systems
(Amendment) Bill 2015 – First meeting on Monday, 2
March 2015
• Target completion of legislation: end of 2015

42. Benefits to FinTech development
By introducing the regulation, we can
• provide clarity in the legislation;
• provide a level playing field for market participants; and
maintain Hong Kong’s status as an international financial centre;
Benefits to FinTech development
• foster innovation in retail payment products and services in Hong Kong
• attract more e-money issuers to establish business in HK
create more opportunities for IT support and security services
companies in HK

43. When the coach is also the referee

44. 9 Banks With iPhone Remote Check Deposit Apps
- APPS MOBILE 06/13/2011
• According to a recent Federal study, the use of paper
checks have declined 7.1% since 2006 thanks to a
45% growth in electronic payments; but that doesn’t
mean we are done with good old-fashioned paper
checks that account for 24.5 billion in annual payments
• Odds are no matter how digital you make your life you’ll
still receive a few paper checks each year. With this in
mind, we found 9 banks that will let you use your
iPhone camera to remotely deposit your check, no
matter where you are

46.
Alibaba

47. Payer Payee
Clearing House
Bank Pr Bank Pe
Cheque
Fund
Flow of Cheque Payment Process
T + 1

48. Payer Payee
FAST System
Bank Pr Bank PeFund
Flow of FAST Payment Process
Online Order NotificationT + 0

49. Payer Payee
Operator
Bank Pr
Fund
Flow of 3rd Party Payment A
Online Order Notification
Bank OT + 0

50. Payer Payee
Operator
Bank Pr
Flow of 3rd Party Payment B
Online Order Notification
Bank Pe
Fund
Fund
Bank O T + 1T + 0

51. Payer Payee
Operator
Flow of 3rd Party Payment C
Online Order Notification
Bank O

56. App vs Wechat

57. WeChat Payment

58. Mobile CRM
Membership Card eCoupon

60. AIDA Model

61. Internet Changed the Flow

62. The New Model
AIDA AISAS

63. Core of O2O Environment

64. Cross-border ePayment

65. One Belt, one Road

66. 10 Aug 2015 -
Leung mulls SME support in ‘One Belt, One Road’
pursuit

67. Crossborder Trading

68. Free Trade Zones

69. Cross-border Online Shopping
Year
Volume
(RMB)
2008 1.2Billion
2013 13.5Billion
2015 30Billion