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PayMe: Hong Kong’s e-wallet

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As one of the largest banks in Hong Kong and worldwide, HSBC faced unprecedented challenges from mobile payment platforms (e.g., Alipay and WeChat Pay). In response, HSBC quickly launched its first e-wallet PayMe, a fee-free, user-friendly mobile app that targeted people and businesses in Hong Kong. Within five years of launch, PayMe had 2.6 million users in Hong Kong.

The success of PayMe is attributed to its user-friendly design and its initial targeting of the peer-to-peer (P2P) market. Unlike its competitors, PayMe focused on the P2P market by solving consumers’ difficulty in transferring money among friends without cash or the many steps of online transfer. As the payment between friends naturally had a social network effect, PayMe’s customer base grew exponentially with only minimum marketing expenses.

However, when expanding to the fee-charging P2M market, PayMe experienced more challenges as merchants were reluctant to pay for an additional payment method. With 2.6 million users and their HKD8mn in the e-wallet, PayMe’s executives were exploring ways to trigger a virtuous cycle in the two-sided market, i.e., P2P and P2M markets. How can PayMe expand its customer base while becoming a profitable payment platform?

Learning Objective:

  1. Students will learn about the fundamental framework of marketing strategy, i.e., the 5Cs (company, customer, competitor, context, and collaborator) and the 4Ps (product, price, promotion, and place), and the interplay of those elements.
  2. Students will apply the marketing strategy framework to a fintech start-up in a new market setting (i.e., a two-sided market with consumers and merchants on two sides).
  3. Students will explore how to trigger and maintain a virtuous cycle in a two-sided market, i.e., how to expand the market while monetizing the business.
  4. Students will discuss the opportunities and challenges associated with developing a high-tech new product to change customers’ habits and growing a customer base with minimum marketing expenses in a highly competitive market.

Year of Publication: 2022
Ref. No.: 22/730C
Discipline: Marketing, Strategy & General Management
Industry: Banks & Diversified Financials, Software & Services
Country: Hong Kong SAR
Company: HSBC
Languages: English
Pages of Text: 6