Following is a question by the Hon Chan Chun-ying and a written reply by the Acting Secretary for Financial Services and the Treasury, Mr Joseph Chan, in the Legislative Council today (October 7):
 
Question:
 
     It has been reported that in recent years, a number of emerging aggregated payment platforms have appeared in the market, soliciting small merchants for co-operation with low handling fees and promotional offers such as "Buy Now, Pay Later". However, some of these platforms have given rise to problems such as payment defaults and fake payments one after another, causing severe losses to merchants. It is learnt that some payment platforms are registered only as financial technology companies and have not obtained any financial services licences, nor have they disclosed their partner institutions or operational status, and their operations are thus not subject to regulation. In this connection, will the Government inform this Council:
 
(1) of the total number of complaints received by the authorities involving new types of payment platforms in the past three years, and the total amount of money involved in such cases;
 
(2) whether the authorities will bring such new types of payment platforms under the regulation of relevant ordinances such as the Payment Systems and Stored Value Facilities Ordinance, put in place a mandatory registration or licensing regime for such platforms, or even consider requiring upstream licensed institutions to assume "joint and several regulatory responsibility" for the payment platforms with which they co-operate; if so, of the specific plans; if not, the reasons for that; and
 
(3) given that emerging financial instruments may entail risks, whether the authorities have plans to implement a more forward-looking dynamic regulatory mechanism (e.g. identifying regulatory blind spots through complaint cases), so as to take timely responsive measures and enhance capabilities in risk warning and prevention; if so, of the details; if not, the reasons for that?
 
Reply:
 
President,
 
     The Government and financial regulators have been continuously monitoring the latest developments in the financial market (including emerging payment models), and have been taking appropriate enforcement action as necessary under the relevant statutory regulatory frameworks to maintain financial stability and safeguard the rights and interests of clients and the public.
 
     Having consulted the Hong Kong Monetary Authority (HKMA) and the Hong Kong Customs and Excise Department (C&ED), my reply to the three parts of the question is as follows:
 
(1) Between January 2024 and September 2026, the HKMA received a total of 16 complaints regarding suspected unlicensed issuance or operation of stored value facilities (SVFs). Upon investigation, one of the complaints was substantiated, and the complainant in this case did not report any monetary loss. Regarding this complaint, the HKMA is actively following up with the company concerned and will take appropriate action depending on the progress of the case.
 
(2) and (3) The HKMA regulates SVFs under the Payment Systems and Stored Value Facilities Ordinance (Cap. 584) (PSSVFO) to ensure the safe and sound development of the local retail payment market. Under the PSSVFO, unless a statutory exemption applies, it is an offence for any person to issue or operate SVFs in Hong Kong without a licence.
 
     In addition, according to the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Cap. 615) (AMLO), any person who operates money changing or cross-border remittance services (i.e. money service as defined under the AMLO) is required to obtain a licence from the C&ED, unless a statutory exemption applies (including where the relevant money service is an ancillary business of the aforementioned SVF licensee). Therefore, if the business of a relevant payment platform involves money changing or cross-border remittance, it is also subject to regulation under the licensing regime for money service operators.
 
     The existing regulatory regimes have already imposed stringent and effective risk management requirements on relevant licensees. When considering relevant licence applications, the HKMA and the C&ED will assess the applicants' competence, integrity, and ability to operate fairly. They will also ensure that the licensees comply with requirements relating to customer due diligence, record keeping, proper handling of clients' funds and other licensing requirements in the course of business, thereby fully protecting the clients of the relevant payment platforms and mitigating potential money laundering risks.
 
     In cases involving suspected unlicensed SVF operation or non-compliance with the PSSVFO, the HKMA will intervene directly. Depending on the nature of specific cases, the HKMA will collaborate with other relevant regulatory bodies, and will refer cases to law enforcement agencies as appropriate. The C&ED will likewise take decisive and appropriate enforcement action against cases violating the licensing regime for money service operators.
 
     Furthermore, institutions providing "Buy Now, Pay Later" services, except for banks which are regulated by the HKMA, are required to obtain a money lender's licence under the Money Lenders Ordinance (Cap. 163) if their services involve the operation of a money-lending business. Such lending transactions are subject to the regulation under the Money Lenders Ordinance and the licensing conditions.
 
     In the face of the rapid evolution of financial technology, the Government and financial regulators will continue to proactively mitigate risks, including strengthening cross-departmental co-operation and intelligence sharing to effectively identify, investigate and combat illicit financial activities. We will also closely and continuously monitor market developments, complaint cases and trends, as well as the development of emerging payment models, so as to adapt to the rapidly changing electronic payment market through suitable policy and regulation.

Ends/Wednesday, October 7, 2026
Issued at HKT 14:05

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