What Changed
- HKMA received 16 complaints on suspected unlicensed SVFs between Jan 2024 and Sep 2026; 1 substantiated with zero monetary loss.
- SVF issuance and operations require a licence under Cap. 584, while money service operations fall under Cap. 615 supervised by C&ED.
- Non-bank BNPL providers running money-lending operations must be licensed under the Money Lenders Ordinance (Cap. 163).
On October 7, 2026, the Hong Kong SAR Government issued an official written response to Legislative Council Question 13 (LCQ13) regarding the regulation and oversight of emerging payment platforms, aggregated payment providers, and "Buy Now, Pay Later" (BNPL) financial instruments. The reply was delivered by Mr Joseph Chan, Acting Secretary for Financial Services and the Treasury, after consultation with the Hong Kong Monetary Authority (HKMA) and the Hong Kong Customs and Excise Department (C&ED).
Background and Market Concerns
In recent years, several emerging aggregated payment platforms have operated in Hong Kong SAR, soliciting small merchants through competitive handling fees and promotional mechanisms such as BNPL services. However, concerns were raised in the Legislative Council by Hon Chan Chun-ying regarding reports of payment defaults, fake payments, and operational risks causing losses to local businesses. It was noted that certain payment platforms are registered solely as financial technology companies without securing financial services licences, omitting disclosures regarding partner institutions or operational status, thereby giving rise to potential regulatory gaps.
Official Complaint Statistics (January 2024 – September 2026)
Addressing inquiries regarding complaint figures and monetary losses associated with new payment platform models, the Government provided official data recorded by the HKMA:
- Total Complaints Received: Between January 2024 and September 2026, the HKMA received a total of 16 complaints regarding suspected unlicensed issuance or operation of stored value facilities (SVFs).
- Substantiated Cases: Following formal investigations, exactly one complaint was substantiated.
- Financial Losses: The complainant in the single substantiated case reported zero monetary loss.
- Ongoing Actions: The HKMA is actively following up with the specific company involved in the substantiated complaint and will take appropriate action based on case progress.
Statutory Regulatory Frameworks in Hong Kong SAR
The reply clarified that Hong Kong SAR's regulatory structure covers emerging payment platforms, cross-border remittance, and BNPL arrangements under three main statutory regimes:
1. Stored Value Facilities (Cap. 584)
Under the Payment Systems and Stored Value Facilities Ordinance (Cap. 584) (PSSVFO), the HKMA regulates SVFs to ensure retail payment safety. Unless a statutory exemption applies, issuing or operating an SVF in Hong Kong SAR without a licence is a statutory offence.
2. Money Service Operators (Cap. 615)
Under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Cap. 615) (AMLO), any entity operating money changing or cross-border remittance services (defined as a "money service") must hold a licence issued by the Commissioner of Customs and Excise (C&ED), unless exempt (such as when the service is ancillary to an SVF licensee).
3. Buy Now, Pay Later (BNPL) Services (Cap. 163)
Entities providing BNPL services that involve operating a money-lending business are subject to regulation based on institutional status:
- Banks providing BNPL services are regulated directly by the HKMA.
- Non-bank institutions offering BNPL services that constitute money-lending operations are required to obtain a money lender's licence under the Money Lenders Ordinance (Cap. 163) and satisfy statutory licensing conditions.
Supervisory Oversight and Inter-Agency Enforcement
When evaluating licence applications under Cap. 584 and Cap. 615, the HKMA and C&ED assess applicants' competence, integrity, and operational fairness. Licensees must maintain compliance with customer due diligence, record-keeping, and proper client fund management requirements to mitigate money laundering risks.
In cases involving suspected unlicensed SVF operation or non-compliance with Cap. 584, the HKMA intervenes directly, collaborating with other regulatory bodies and referring cases to law enforcement agencies where appropriate. The C&ED takes enforcement action against violations of the money service operator regime under Cap. 615. The Government affirmed that financial regulators will continue cross-departmental intelligence sharing and market monitoring to adapt policy to evolving payment models.
Frequently Asked Questions
Question 1: How many complaints regarding unlicensed stored value facilities were received by the HKMA between January 2024 and September 2026?
Answer: The HKMA received 16 complaints regarding suspected unlicensed issuance or operation of SVFs. One complaint was substantiated upon investigation, and no monetary loss was reported by the complainant.
Question 2: Which ordinance regulates the licensing of Stored Value Facilities in Hong Kong SAR?
Answer: Stored Value Facilities are regulated by the HKMA under the Payment Systems and Stored Value Facilities Ordinance (Cap. 584). Operating an SVF without a licence is an offence unless exempt.
Question 3: Which department oversees cross-border remittance and money changing services?
Answer: Cross-border remittance and money changing services fall under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Cap. 615) and are licensed and regulated by the Customs and Excise Department (C&ED).
Question 4: What regulatory rules apply to non-bank entities offering "Buy Now, Pay Later" services?
Answer: Non-bank entities offering BNPL services that involve a money-lending business must hold a money lender's licence under the Money Lenders Ordinance (Cap. 163).
Who May Be Affected
Aggregated payment platform operators, BNPL providers, money service operators, small merchants, and financial consumers in Hong Kong SAR.
Cross-Border Context
Applies to entities operating or offering stored value facilities, remittance services, or payment aggregation within Hong Kong SAR.
What to check next
- Monitor HKMA's follow-up action regarding the single substantiated unlicensed SVF complaint.
- Track potential regulatory guidance updates regarding aggregated payment platform compliance.
This article provides general information and does not constitute legal advice. Consult the official text and obtain advice appropriate to your circumstances where needed.