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359.3404

insight

Part 2: Smart tips on using stored value facilities

(Translation)

Smart Ambassador discussed with Mr Henry Cheng, Executive Director (Monetary Management) of the HKMA, about the philosophy behind the supervision of the stored value facilities (SVFs) in the last inSight article. This article will offer some smart tips to consumers on using the SVFs.

H: Henry
S: Smart Ambassador

 

S:
The SVFs bring convenience to our daily lives. However, the users’ privacy issues are often ignored. Generally speaking, what kind of information will be collected by the SVFs?


H:
User information collected by different kinds of SVFs may differ. Very often, the mobile apps of the SVFs request access to the contact lists on the users’ mobile phones and other stored information such as the locations of the mobile phones. The SVFs need to obtain users’ consent on this before providing services. It should be noted that some service operators only require access to user information and do not upload such information to their own servers while others do.


S:
According to what you said, it seems that using SVFs is not that safe!


H:
Actually, such security issues are not unique to the SVFs. You may review the apps in your mobile phone and you will find that many of them require access to information stored in your mobile phone. Take the game Pokemon GO as an example. It requires the players to activate their mobile phones’ GPS which is tantamount to exposing their whereabouts to others.


S:
I understand that some SVF operators may partner with individual merchants to send promotional materials on their products and services to users via the SVFs. In view of the privacy issues arising therefrom, what should the SVF users do in order to protect themselves?


H:
Before downloading any mobile app, users should always read carefully the terms and conditions, particularly the privacy policy and whether the types of personal data being collected and the purpose of collecting such information are clearly set out. I would like to remind consumers that, while individual SVF operators do not retain the SVF users’ personal information for promotional purpose, once the SVF users effect payment through the SVFs, some merchants may store the personal data of the SVF users. For those consumers who are very concerned about privacy, before using the SVFs they should consider whether they are willing to sacrifice some of their privacy in exchange for the convenience brought about by the SVFs.


S:
We are now in an age of “big data”. Whenever we switch on our mobile phones and go online, it is quite difficult to avoid our personal data being collected.


H:
There are two sides to everything. Many have held that “big data” will become a major new impetus to economic development. If the big data collected by SVFs is used properly, and there is sufficient protection of personal data privacy, it can help promote the development of the fintech industry, benefitting the whole economy and consumers alike.


S:
Besides paying attention to privacy, are there any other tips on using SVFs?


H:
Read the terms and conditions carefully, protect your passwords, and avoid disclosing any confidential information – these are indeed universal principles. SVF users should also check their transaction records frequently, manage their float smartly, and avoid loading too much money onto their facilities. As technological innovation forges ahead, the retail payment ecosystem is undergoing rapid changes, and there are more and more new payment products. The HKMA attaches great importance to risk management in the process of ongoing development of the supervisory regime for SVFs in Hong Kong, so as to ensure the SVFs are effectively operated and the users’ interests are duly protected.


S:
I see. I really look forward to the introduction of many more advanced and secure SVFs for greater convenience in shopping or transfer of money.


H:
I don’t think you have to wait for too long. After the SVF licences are issued, the operators will probably start offering various incentives to promote business. Consumers are advised to compare different SVFs and their functions carefully before deciding which suits them most.


S:
Do you anticipate any chaos at the initial stage after the SVFs commence operation?


H:
This possibility cannot be ruled out completely. After all, SVFs encompass new technologies and may inevitably involve minor glitches at the initial stage of operation. The HKMA will closely monitor market developments to ensure the safe and smooth operation of these payment facilities.


S:
What should consumers do if they are unhappy about certain SVF services?


H:
The HKMA requires that SVF operators put in place appropriate mechanisms and processes to handle customer enquiries and complaints. We also require them to set up an office in Hong Kong to facilitate their communication with the HKMA and consumers.
Smart Tips on using SVF

Written by Smart Ambassador
Smart Ambassador, a staff at the HKMA, is inquisitive and will share with you from time to time the tips on using banking and financial services in a smart and responsible manner.

Last revision date: 24 August 2016
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