Macau Pass, the territory’s sole mobile payment provider, said it’s aiming to launch its MPay electronic wallet in Hong Kong by the second quarter of 2021, taking a step towards making financial services interoperable and daily life more convenient for people living within the Greater Bay Area.

The MPay wallet, in collaboration with Hong Kong’s home-grown cashless payment service Octopus Holdings, will enable Macau’s residents to use their cashless payment platforms denominated in the Macanese pataca with merchants in Hong Kong. It will also enable Hong Kong’s residents, the second-biggest group of visitors to Macau after mainland Chinese tourists, to pay for goods and services across the border more easily without having to exchange the Hong Kong dollar for the pataca.

“The firm hopes to offer MPay in the second quarter of next year in Hong Kong, the favourite destination for tourists and businessmen from Macau,” said Macau Pass director Joe Liu, a former chartered surveyor turned entrepreneur.

The plan is an important step towards creating a seamless payment system across the Greater Bay Area, the cluster of 11 cities with 70 million people in southern China to which Macau and Hong Kong belong. A one-stop service that allows residents across the region to pay for goods and services – without having to deal with three different sets of currencies – is vital in improving the practicality daily life across borders.

MacauPass card, launched in 1999 by Liu’s family business and bus operator Transmac, is a contactless payment service similar to Hong Kong’s Octopus. As many as 3 million of the cards had been sold since its launch, enabling users to pay for public transport, parking, public sector services, dining and retail shopping throughout Macau.

Macau Pass followed with the MPay e-wallet, a smartphone application that can be downloaded freely on Apple’s App Store and Google’s Google Play for users to pay by scanning a QR code. The waller is being used by 440,000 Macanese, or 64 per cent of the territory’s population of 685,000 residents.

Transactions handled by Macau Pass – including MPay and the MacauPass card – amounted to 10 billion Macau patacas (US$1.25 billion) last year. Macau’s currency, called the pataca, is pegged 1-for-1 to the Hong Kong dollar.

One out of every five visitors to Macau, totalling 6.53 million last year, came from Hong Kong, according to the Macau Statistics and Census Service. Their Octopus cards, indispensable for commuting and daily life in Hong Kong with a network of 37,000 merchants, are usable only in a select few places in Macau. City of Dreams, a casino resort operated by Melco Crown Entertainment in Macau’s Cotai area, is one of the few places that accepts the Octopus card.

The limited access in Macau for Octopus prompted Macau Pass to seek a cooperation to tap the huge population of Hongkongers who make up 21 per cent of the territory’s visitors, said Wong Kam Man, deputy general manager of Macau Pass. An extension of the partnership involving the MPay wallet would give the app access to a wider merchant network in Hong Kong, she said.

Macau Pass agreed in 2015 to work with Ant Group’s Alipay, followed by an agreement in 2018 with Tencent Holdings’ WeChat Pay, to serve the mainland Chinese visitors to Macau, Liu said. The MPay wallet is also usable in hundreds of point-of-sales terminals on the mainland, as Macau Pass is the first company that is usable across all three jurisdictions in the Greater Bay Area, he said.

“Five years ago, we saw ample opportunity [in the tourism market] from the rising tourist arrivals from the mainland,” said Liu.

Macau Pass, with 250 employees on staff, collects a fee equivalent to 1.5 per cent of the value of every transaction. Half of its fee income comes from tourists using Alipay or WeChat Pay in Macau, with the remainder earned from local transactions. The plunge in the number of tourist arrivals in Macau due to the coronavirus pandemic has hurt the company’s fee income, he said.

Tourist arrivals to Macau grew 28.33 per cent to a peak of 39.4 million in 2019, from 30.7 million in 2015, before declining to 3.57 million in the first eight months this year as the coronavirus pandemic forced the city’s tourism industry to a near standstill.

“Macau has its unique characters and cultural heritage among the 11 cities in the Greater Bay Area will definitely attract more tourists,” Liu said.