Hong Kong authorities have outlined how existing financial regulations apply to emerging payment platforms, including aggregated payment services and “Buy Now, Pay Later” offerings. In a written reply to the Legislative Council on 7 October 2026, Acting Secretary for Financial Services and the Treasury Mr Joseph Chan said regulators are monitoring developments in the electronic payments market and taking enforcement action where necessary. The response, published on the Hong Kong Government website, addressed concerns about unlicensed operators, payment defaults and fraudulent transactions affecting merchants.
The discussion comes as Hong Kong continues broader efforts to strengthen its digital public infrastructure and improve oversight of emerging technologies and digital services. Authorities said financial regulators are closely monitoring market trends and adapting policy approaches to address risks linked to evolving payment models.
Complaints linked to suspected unlicensed activity
According to the reply, the Hong Kong Monetary Authority (HKMA) received 16 complaints between January 2024 and September 2026 concerning suspected unlicensed issuance or operation of stored value facilities (SVFs). Following investigation, one complaint was substantiated. The complainant in that case did not report any financial loss.
The Government stated that the HKMA is continuing to follow up with the company involved and will determine appropriate action based on the progress of the case. The response did not identify the company or provide additional operational details.
Existing legal framework for payment platforms
The Government said the Hong Kong Monetary Authority regulates stored value facilities under the Payment Systems and Stored Value Facilities Ordinance (Cap. 584). Under the legislation, issuing or operating SVFs in Hong Kong without a licence is an offence unless a statutory exemption applies.
The reply also noted that operators involved in money changing or cross-border remittance services may require licensing under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Cap. 615). These activities are regulated by the Hong Kong Customs and Excise Department through the money service operator licensing regime.
Authorities said both regulatory systems include requirements covering customer due diligence, record keeping and the handling of client funds. Regulators also assess applicants’ competence, integrity and operational capability before granting licences.
Regulation of “Buy Now, Pay Later” services
The Government clarified that providers of “Buy Now, Pay Later” services may also fall under existing lending regulations. Except for banks supervised by the HKMA, organisations operating money-lending businesses are required to obtain a money lender’s licence under the Money Lenders Ordinance (Cap. 163).
The reply highlighted that lending activities conducted through these services remain subject to licensing conditions and statutory controls. The clarification follows growing concern among merchants about payment defaults and fraudulent transactions associated with some digital payment platforms.
Cross-agency monitoring and enforcement
Authorities said the HKMA will intervene directly in cases involving suspected unlicensed SVF operations or breaches of the Payment Systems and Stored Value Facilities Ordinance. Depending on the circumstances, cases may also be referred to law enforcement agencies or handled jointly with other regulators.
The Customs and Excise Department was also described as taking enforcement action against breaches of the money service operator licensing regime. The Government added that regulators are strengthening cross-departmental co-operation and intelligence sharing to identify and combat illicit financial activities more effectively.
The latest statement reflects wider efforts by Hong Kong authorities to update governance approaches for rapidly evolving technologies and digital services, including recent work on AI governance and regulatory measures. Officials said regulators will continue monitoring complaint trends, emerging payment models and broader developments in the electronic payments market to ensure policy and regulatory frameworks remain responsive.
This article is created with the assistance of OpenGov AI.