If you’re thinking about ecommerce and building your own online store in Hong Kong using Shopify, you’re going to eventually ask about collecting payments online. In recent years, new payment options such as Apple Pay and Alipay have made shopping easier. Online shoppers today expect convenient and frictionless payments as a must-have for a great online customer experience.
Last Updated: September 1, 2021
In our experience, we sometimes see clients put off thinking about payments until they are ready to launch their store. We caution against that because even though Shopify has a lot of payment gateway options, we recommend that you start researching different payment options early and set up your merchant account so that accepting payments doesn’t become the bottleneck for launch as you get close to rolling out your Shopify store.
In this post, we will discuss different payment gateway options for Shopify Hong Kong merchants that include:
- An Overview of Shopify Payments for Hong Kong
- An Overview of Hong Kong’s Payment Gateways
- What to Ask When Choosing Payment Providers
An Overview of Shopify Payments for Hong Kong
Shopify Payments is available in Hong Kong as well as many other markets such as the United States, Puerto Rico, Canada, the United Kingdom, Ireland, Australia, New Zealand, and Singapore. All merchants using Shopify Payments can enjoy multicurrency support for ten major currencies. In 2021, Shopify released a Checkout Extension that allows merchants to craft checkout experiences, use third-party apps, and use Buy Now Pay Later options.
In addition, Shopify has a list of supported Hong Kong payment gateways, including Paypal, AlipayHK, and AsiaPay. In addition, the new Shopify Checkout has opened up further opportunities for third-party providers to offer conveniences, such as hoolah’s Buy Now Pay Later installments. Shopify also allows merchants to offer customers multiple payment options. For example, it is possible to offer Shopify Payments for credit card transactions, Apple Pay, Google Pay, manual payments such as Cash-On-Delivery (COD), bank transfers, PayMe, and FPS.
In the early days of ecommerce, payment gateway solutions were fragmented due to factors such as needing to support localized payment options, currency and exchanges and banking regulations. Now, online payment platforms aim to be cross-border from day one, whether it is popular regional providers or global ones. If you are considering additional options, choose a payment gateway that is:
- supported in your target markets,
- convenient for your shoppers, and
- is economical and easy to manage for you.
We recommend reaching out to payment gateway vendors early to understand:
- if they will do business with you (some may have restrictions on businesses they serve)
- their setup and per transaction rates/fees and
- if they can accommodate your business requirements, such as subscriptions or installments
Now, let’s discuss factors to compare between payment gateway options that may affect your business.
An Overview of Hong Kong’s Payment Gateways
To help you understand the available payment gateways or payment options that Shopify merchants have used, we have listed out some popular providers that clients have inquired about. This is not an exhaustive list of all the available payment options supported by Shopify in Hong Kong.
Founded in 1999, PayPal remains one of the global leaders in online payment processing despite many new providers in recent years. PayPal can be offered in conjunction with Shopify Payments. When merchants set up a Shopify store, Shopify creates a Paypal Express Checkout account automatically with the email address used for the Shopify store. Merchants with existing Paypal accounts will receive PayPal payments right away. Merchants can also test the Paypal integration on a trial Shopify account once they have launched the store (which means it is viewable to the public).
Paypal has a tiered fee structure based on sales volume that starts at HK$2.35 plus a % of the invoiced amount. Note that Hong Kong transactions and cross-border transactions have different fees. Paypal does not charge for withdrawal from their platform to your local bank account (such as US Dollars to a US bank account or HK Dollars to a Hong Kong account), but it does charge if the currency differs from the receiving account.
AsiaPay was founded in 2000 and is used by many local Hong Kong based companies. Some of the clients listed on their website include household names such as Cathay Pacific and HKTVmall. They support diverse payment options such as China Unionpay, PPS, and WeChat Pay.
AsiaPay, which has presences in Singapore, London, China and other countries and has multi-currency support. Merchants will have to contact the company directly for rates and setup support.
hoolah - Buy Now Pay Later installments
Founded in Singapore, hoolah expanded its Buy Now Pay Later solution to serve the Hong Kong market and is listed as an official payment gateway. hoolah takes credit card and debit card payments and splits purchases into three interest-free installments. The debit card option gives merchants access to online shoppers who may not yet have access to high amounts of credit. In addition, hoolah supports integrated O2O retail through integrations with Shopify as well as physical retail stores. You can learn more about hoolah in this article.
In 2021, AlipayHK released a Shopify integration aimed to support merchants serving APAC markets without any setup fee. The upgraded AlipayHK integration enables merchants to accept payments from popular regional platforms such as China Mainland (Alipay), Hong Kong S.A.R (AlipayHK), the Philippines (Gcash), and Malaysia (Touch'n Go).
Alipay has already been adopted by international companies such as Macy’s, Bloomingdales, Air Asia, and Cathay Dragon. Merchants can now download the AlipayHK app on Shopify and “Alipay (Direct)” as an alternative payment option in addition to the Shopify Checkout.
NihaoPay is a popular payment solution that helps businesses collect payments from popular digital wallet providers in Asia such as KakaoPay, PayPay, Touch n Go, GCash, Dana, Truemoney Wallet, Alipay, and Wechat Pay. While it is listed as an official payment gateway for Hong Kong, merchants will need to contact the platform to register their business and receive an account before they can integrate it with their Shopify store. You can find out more on their website.
FPS and PayMe
Faster Payment System (FPS) and HSBC PayMe wallet are popular payment methods amongst consumers and merchants in Hong Kong, which means many online merchants may want integrations. Currently, neither payment options are directly integrated into the Shopify ecosystem, but some third-party payment providers may provide integrations with a QR code scan.
In addition, Shopify merchants can create a manual payment method with instructions for customers to pay for an order. If a manual payment method is created, then merchants should also consider a method of clearly referencing order numbers and settled payments will need to be manually marked on the Shopify admin as paid.
Accepting Cryptocurrencies on Shopify
As cryptocurrencies are gaining popularity, Shopify has enabled payment integrations with some of the world’s largest providers including:
Adding a cryptocurrency payment method to a Shopify store can enable customers to pay in Bitcoin, Bitcoin Cash, DAI, Ethereum, Litecoin, Dogecoin, and potentially hundreds of other virtual currencies.
To enable these cryptocurrency platforms, merchants must create an account with these platforms and in many cases receive an API key to enable the Shopify integration. After the account has been created on the cryptocurrency provider, merchants can go to the Payment providers page of the Shopify admin and select “alternative payment methods”. Find out more at Shopify’s cryptocurrency page.
What to Ask When Choosing Payment Providers
Payment Gateway Fees
The obvious bottom line for many merchants is to look for the best rates. As such, merchants will have to do calculations to compare between any differences in fee structures amongst different payment gateways. For example, Paypal has a tiered pricing model while Stripe generally has a flat fee structure for businesses. Payment gateways may also charge differently for local versus cross-border transactions. Estimate your sales volume, payments across currencies and contact payment vendors to see what their rates are for your business type and if they may have any special offers.
Cross-border or Multi-Currency Rates
For companies looking to do cross border ecommerce, foreign currency transaction fees will also be an important factor. For example, if you have you have a Hong Kong bank account and take US dollars when selling to the US, you’ll want to think about how money ultimately flows back into your Hong Kong bank account and what are all of the accompanying transaction fees. For example, some vendors like Stripe may allow you to withdraw the US dollars into your Hong Kong account without converting to HKD, while Paypal may require you convert your USD into HKD first before depositing in your local Hong Kong bank (which may incur exchange rate costs).
Fees, while obviously important, shouldn’t be the only consideration factor. Evaluating how the payment solution integrates into your Shopify store and the shopper’s checkout flow is critical as checkout usability can affect shopper purchasing and cart abandonment. Think about how important on-site vs off-site checkout is to your shopper base. We refer to on-site payments as allowing users to pay directly within your online store, while off-site payments means a redirection to the payment gateway’s page (e.g., redirecting to the Paypal or AsiaPay site for final payment).
We recommend that merchants find out how the checkout flow works for different payment gateways in the early stages of your store building project.
Sometimes choosing a payment gateway may also depend on the payment methods that your target shoppers prefer. For example, merchants selling to customers from mainland China will want to factor in options such as Alipay or WeChat Pay while those selling to tech-savvy shoppers may want to consider supporting options such as Apple Pay and Google Pay. Hong Kong merchants may want to turn on manual payment options such as Cash-On-Delivery (COD) and bank transfers. In addition, Shopify allows merchants to create custom payments, such as PayMe.
Another reason we encourage merchants to speak to payment gateway representatives is because the representative can explain details of what merchant protections are offered, how disputes are handled, and any other payment handling procedures that merchants should be aware of. In the ecommerce industry, depending on what you are selling and who you are selling to, you may run into shopper chargebacks or fraud. Understanding how your payment vendor will handle these cases helps mitigate potential risks.
Your Specific Requirements
What special requirements might an online business have? Some examples include the authorization period, which is the number of days a merchant can have to receive the balance once a shopper’s payment is authorized.
Online payments are a crucial part of the ecommerce experience. The payment gateway that you choose can help encourage sales by providing your target customers with their choice payment options. Consider shopper needs, your specific business requirements and the rates and fees offered by different vendors based on your sales volume and target markets (factoring in currency exchanges and surcharges).
Finally, ensure that your payment gateway is easy to integrate into your online store. By giving yourself time to research payment options in parallel with your online store development, you can ensure timely store launch.
Wave Commerce is a Shopify and BigCommerce partner and may receive affiliate revenue from merchant subscriptions to these platforms.