Engage in the development of the “smart city” in Macao



The general impact and long duration of the COVID-19 pandemic has dealt a severe blow to Macao’s economy focused on exporting services. Affected by travel restrictions and social distancing measures, GDP fell more than 50% in 2020 and visitor arrivals fell 79.6% in the fourth quarter. Nowadays, the economy is still on a slow recovery and the development of the banking sector in Macau remains static. The pandemic has had a profound impact on people’s lives and online commerce has become more popular.

To adapt to the changes and accelerate the economic recovery, the Macao government presented its vision of becoming a “smart city”, an urban space that uses different types of technology and electronic data to improve operational efficiency.

Seizing this opportunity, ICBC (Macau) has developed electronic payment services with the aim of promoting “cross-border,“ intersectoral ”and“ borderless banking ”services, overcoming obstacles and creating a new business model for the sector. .

The road to healing
Last year marked a difficult and extraordinary year for Macao Special Administrative Region, facing unprecedented challenges related to the novel coronavirus pandemic. Gambling and tourism revenues suffered the most. By contributing over 50% of GDP and generating over 70% of government revenue, games and tourism are the central pillar of the industry in Macau. Due to the outbreak of the pandemic, gaming revenue fell 79.3% for 2020 and GDP fell 45.9% in real terms for the fourth quarter of 2020.

Private consumption fell 16.3% year-on-year as residents went out less and made fewer trips abroad amid the outbreak and the economic outlook remained uncertain. All sectors of society – from small to large companies – have been strongly affected and have encountered multiple difficulties and challenges. Despite the downturn in the gaming industry and tourism, unemployment rates only increased from 1.7% (2019 Q4) to 2.7% (2020 Q4).

As COVID-19 was gradually brought under control, travel restrictions were relaxed in August 2020. As of March 2021, visitor arrivals stood at 750,000, an increase of 76.7% from month to month. other and a 255.4% year-over-year increase.

Consumer demand in Macau has been unleashed and the market atmosphere has improved. Gaming revenue returned to about 40% of its pre-pandemic level in the first quarter of 2021. In March 2021, gaming revenue jumped 58% year-on-year to $ 1.04 billion, which is the best from the start. of the pandemic. As the vaccination program continues, the upward trend in the economy is expected to continue (see figure 1).

Macau’s banking sector remained robust and resilient in 2020. The value of assets among local lenders stood at $ 277.9 billion at the end of 2020, up 10.2% year-on-year, while The sector’s operating profits reached $ 2.14 billion, a jump from $ 2.13 billion at the end of 2019, according to the Macao Monetary Authority (AMCM).

The capital adequacy ratio remained around 14% and the NPL ratio at less than 1% throughout 2020. However, the total loan growth rate fell from 10% to 3% to the end of 2020 (see figure 2). In addition to traditional banking activities, the banking sector in Macau needs to find new areas of growth to support industry dynamics, such as electronic payments and online banking.

Develop an electronic payment market
In the city’s first official five-year development plan, covering the period 2016-2020, as well as in Macau’s political speech in 2021, the government laid out its vision to make Macau a smart city. Mobile payments are one of the major building blocks in making Macau’s smart city vision a reality. As reported by AMCM, the city has around 70,000 point of sale systems used for QR code payments (electronic payments). Indeed, new regulations have been published to accelerate the development of the smart city since 2019, such as the law on cybersecurity, the law on e-governance and amendments to the law on the prevention of cybercrime. In light of the coronavirus outbreak, brick-and-mortar operations have recently experienced a decline.

The government has also recommended contactless payment and online banking solutions over traditional over-the-counter services for residents. Considering the mobile payment applications currently available and the financial institutions promoting electronic payments in Macau, banks have taken a more modern and technological approach.

Simple Pay, a new payment method introduced by AMCM, will allow customers to use their mobile phones to scan businesses’ QR codes to pay for a service or product. Its pilot period for the first stage was launched in February 2021. Simple Pay aims to integrate all types of electronic payment opportunities into a single system, allowing businesses to accept all existing payment methods using ‘a single terminal or a QR code. Before the adoption of Simple Pay, providers would need separate machines to accept payments from different banks.

In 2020, Macau recorded more than 65.49 million internet payment transactions, for a total of $ 791.25 million. The AMCM would provide more resources this year to improve the local digital financial infrastructure. Contactless payment is expected to continue to grow beyond the pandemic.

Turning challenges into opportunities
In 2020, ICBC (Macau) accurately identified the development trend of financial technology and actively implemented the localization of its e-ICBC strategy. It is the first local bank to establish a smart grid, improving the financial services ecosystem and leading the development of financial technology. In 2020, the number of customers using online banking and mobile banking started to increase rapidly.

ICBC (Macao) therefore continued to advance its online banking service and recorded positive results. The bank is the first overseas member of the ICBC group to launch electronic payments, covering online e-commerce platform payment scenarios and offline code reading payments. Electronic payment is a contactless payment solution, increasing operational efficiency and enhancing security compared to traditional card payment methods.

In 2020, the number of customers using online banking and mobile banking started to increase rapidly

In addition, the tap-to-pay feature promotes hygiene in light of recent events, with customers only coming into contact with their mobile phones, reducing the risk of the virus spreading.

ICBC (Macau) continued to optimize aggregate payment services, creating several firsts and providing diversified and convenient acquisition services to merchants, leading the development of electronic payments in Macau. ICBC (Macau) continued to develop the local market to improve basic skills and maintain market leadership through online card application, global payments, mobile payments and various other payment scenarios. Credit card issuance increased five percent in 2020.

Although the deal amount fell slightly by 6% due to the pandemic, it was still above the 18% average drop in Macau’s banking sector. The bank led the founding of the Macau Cross-Border E-Commerce Industry Association and was honored as Life President, creating a comprehensive platform for local cross-border e-commerce businesses.

The bank also executed the strategic transformation of smart banking and launched a new version of Mobile Banking 4.0, transforming banking from offline to online, with the aim of improving service quality and increasing business. client. ICBC (Macau) has integrated popular retail banking products into mobile banking with multiple features unheard of in Macau, such as one-click transfer, ICBC Express and 24/7 remittance services , maintaining the leading position in the field of local mobile telephony. banking services.

Financial ecosystem
Finally, ICBC (Macao) continued to develop innovative businesses and laid the foundation for the continued development of online banking payment services. The bank launched ICBC electronic payment with a complete transformation of retail, creating an open financial ecosystem.

In 2020, ICBC electronic payment had more than 110,000 users and was available at more than 7,000 merchants in Macau, an increase of 140% compared to 2019. The number of transactions was around three million and the volume exceeded 50 million. dollars, which is more than 200% year-over-year growth. The bank continues to optimize the life platform in mobile banking and launched an online application interface for SMEs to improve processing efficiency and meet customer needs.

The past 12 months have tested the resolve of the banking industry, and ICBC (Macau) has met the considerable challenges by fully engaging in the e-commerce and contactless payments market in Macau and taking social responsibility. Macau’s post-pandemic economic recovery.


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