Bank of China Hong Kong expanding e-HKD prepaid pilot to 50 products

It is now inviting customers to participate in the pilot.

Bank of China (Hong Kong) (BOCHK) is expanding its hypothetical e-HKD prepaid pilot services to 50 prepaid service products and is inviting customers to participate in the pilot.

The services pilot, which launched in early September, saw BOCHK employees purchase prepaid services from participating merchants. These funds were were subsequently converted into e-HKD, which were then managed and operated by smart contracts. 

BOCHK has submitted pilot results to the Hong Kong Monetary Authority (HKMA), and has since made enhancements to its e-HKD pilot.

Xing Guiwei, deputy chief executive of BOCHK, said that of the surveyed merchants who participated in their pilot, 85% believe that the e-HKD pilot can enhance consumer loyalty more effectively than non-monetary reward programmes.

“The pilot can effectively reduce the technical requirements and additional resources allocated to facilitate merchant participation in prepaid consumption. In addition, it significantly boosts consumers’  confidence and trust in prepaid services while alleviating their concerns about the safety of their funds,” Xing said, adding that BOCHK is pleased to receive positive response from merchants and consumers.

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“The bank will  further optimise our existing solutions based on this feedback, while also exploring value  creation opportunities arising from further e-HKD use cases as per the HKMA’s research report,” Xing said.

BOCHK’s hypothetical e-HKD prepaid services pilot is integrated into the existing BoC Pay  mobile application and BoC Bill Integrated Billing Service. Pilot merchants can set up a  smart contract and predetermine its fulfilment conditions. 

During the purchase process, consumers’ funds are converted into e-HKD and bound to the smart contract, which then automatically executes fixed or non-fixed payments according to the contract conditions. Should the merchant is unable to fulfil the contract, the remaining funds can be refunded to the consumer.