Don’t let the impact of Cash Voucher Plans to go Waste

Adam Au
4 min readAug 15, 2021

The recent $5000 shopping voucher scheme introduced by the Hong Kong government has thrown the public into a temporary spending spree.

Amidst opposition the Hong Kong government rejected the cash handout plan as was offered in 2020. The electronic cash plan was conceived to stimulate the local economy, and on the surface, the plan worked.

Unlike other economic policies that take time to show their effects, distributing vouchers is normally regarded as quick-fix fiscal policy. During the global financial crisis in 2008, cities such as Chengdu and Hangzhou in China gave out pre-paid vouchers to its citizens to ramp up consumption.

Some contrarians argue that doling out cash provides greater relief to hard-hit low-income communities. But there is cultural idiosyncrasy at play. Compared to westerners, Chinese tend to save, which means that giving out cash might not produce the desired impetus in consumption. There is no point bickering about past policy. We should focus instead on how we can make best use of the unexpected spending craze initiated by the voucher plan.

The adoption of digital payments is more prevalent than ever, as they benefit both businesses and consumers in a myriad of ways. In China, digital cashless payment is commonplace. In fact, the use of contactless payment is so mainstream that it has prompted China’s central bank to ban businesses from cash payment refusal.

The cash voucher initiative is a perfect method for the Hong Kong government to transition to digital payment. Touted as a world city, Hong Kong can no longer sideline digital payment or its surrounding technology.

Lest we forget, Hong Kong was one of the first pioneers to introduce a cashless payment system in the form of the Octopus card in 1997. Since then, the global payment landscape has developed leaps and bounds. By comparison, full digital uptake in Hong Kong has been slow. For example, the absence of digital payment in taxis, wet markets and local “cha chaan teng” (Hong Kong-style cafes) continue to perpetuate the image of the dominance of hard-cold bills and coins. Worse still, computer stores often add a few per cent to any credit card payment, making cash the default choice when buying the latest gadgets.

An ingrained cash culture, a population aversive to new digital payment methods, and the fear of privacy and security loss pose as major barriers for Hong Kong to go cashless. Yet, at the start of the pandemic in 2020, the touchless payment options were sought in the name of safety. To continue cashless payments the Hong Kong government must capitalize on the rollout of the shopping voucher scheme.

It seems the population has finally embraced the use of digital payment due to the shopping voucher scheme. To give currency to its use, perhaps the Hong Kong government can begin by providing subsidies to marketplace vendors, taxi drivers and cafe owners to install a QR code scanning machines as a sweetener?

Getting the public to warm-up to the idea of using a cashless system might inspire other payment platforms that enable the proliferation of smart technologies.

There is a reason why businesses and customers alike are abuzz about cashless, contactless payment options. Contactless payment signals heightened connectivity, which can help realize the promise of a true smart city. In fact, it’s more than just payments. Getting the public to warm-up to the idea of using a cashless system might inspire other payment platforms that enable the proliferation of smart technologies. The rapid expansion of the “Internet of Things” has offered companies an opportunity to expand to a diverse ecosystem of internet-enabled devices beyond our mobile phones.

A digital future for money once foreshadowed by cryptocurrencies might just be around the corner.

For example, enabling automobile usage to shift to cashless payment platforms is no longer a science fiction techno-wonder. From gas stations, congestion pricing to parking, mature in-car infotainment system will enable automobile to be leveraged as an all-inclusive payment processing platform. Soon, automobiles may be able to uncover defective components and schedule maintenance automatically thereby reducing traffic accidents to the benefit of drivers and pedestrians alike.

In the grand scheme of things, Hong Kong’s promotion of contactless payment will also deepen closer integration with Mainland China. Beyond the ubiquity of cashless payment, China is on the verge of launching the world’s first centralized digital currency. Money exchange in many places has already gone virtual with the wide adoption of payment apps and credit cards. But these are just the medium to transact money electronically. China is turning legal tender into a digital ledger that enables institutions to monitor bank wallets and transactions in real time. A digital future for money once foreshadowed by cryptocurrencies might just be around the corner.

If Hong Kong is keen to hop on the technological bandwagon, we must start with changing our deep-rooted cash culture. With cross-border renminbi transactions growing year-on-year, Hong Kong could play an all-important role in the digital currency launch. The first step for us is to slowly build up the momentum of becoming truly cashless.

With data breach incidents happening on a regular basis, people will always display an ambivalence towards the technology security. On the one hand, people prefer the convenience of not carrying cash around and the seamless exchange of funds. On the other hand, they are worried that the automatic nature of transfer cause them to feel they are no longer in control over the transactional process.

As such, modern technological advancement itself does not necessarily lead to public acceptance. Rather, convenience in payment will only be widely accepted with the combination of directness, efficiency, and security. China has re-imagined the concept of money for years. It’s time for us to join in as well.

(An abridged version of this article first appeared in the South China Morning Post)



Adam Au

Head of legal with an MBA@MIT. Exploring topics on education, data privacy, tech, entrepreneurship and PE/VC landscape.