Hong Kong has warned payment platforms operating without official licenses that enforcement actions are ready to be taken. The Hong Kong Monetary Authority (HKMA) received 16 complaints regarding illegal stored value facility services between January 2024 and September 2026. Of those reports, one complaint was found to have violated regulations, although the complainant suffered no financial loss.
The written reply was delivered by Acting Secretary Joseph Chan to Hong Kong’s Legislative Council on October 7, 2026, following consultations with the HKMA and the Customs and Excise Department. The move underscores the legal boundary between regular financial technology companies and licensed financial service providers.
Why Small Merchants Are Targeted
Lawmaker Chan Chun-ying raised the issue in the legislative council after observing a surge in payment aggregators targeting small businesses. These platforms entice merchants with promises of low transaction fees and buy now, pay later (BNPL) schemes. However, behind the low-cost appeal, reports of defaults and fake payment transactions have emerged, harming merchants.
Many platforms scrutinized by regulators were found to have registered merely as ordinary fintech companies. That technology corporate status was treated as though it were sufficient to handle customer fund flows, even though they lacked official financial service licenses from relevant authorities.
Three Frameworks Governing Operating Licenses
The Hong Kong government outlined three separate legal frameworks that payment system providers must comply with. First, under the Payment Systems and Stored Value Facilities Ordinance (PSSVFO), anyone issuing or operating a stored value facility in Hong Kong without a license commits a criminal offense, unless granted a statutory exemption.
Second, for foreign currency exchange or cross-border remittance activities, operators must obtain a license from Customs and Excise under the Anti-Money Laundering Ordinance. Third, non-bank service providers offering BNPL facilities must hold an official money lenders license under the provisions of the Money Lenders Ordinance. The separation of these three licensing regimes closes loopholes for platforms attempting to disguise financial activities behind the label of digital intermediaries.
A Different Trend on the Institutional Track
The regulator’s strict stance against unlicensed intermediaries comes as Hong Kong expands its regulated digital asset infrastructure. Anchorpoint, a consortium backed by Standard Chartered, HKT, and Animoca Brands, has begun rolling out HKDAP - a Hong Kong dollar stablecoin - in phases for institutional investors. Licensed crypto exchange HashKey Exchange has also joined the token’s distribution network.
For merchants and retail shop owners, the monetary authority’s warning makes one thing clear: the lure of cheap transaction fees from unlicensed aggregators carries default risks that they must bear themselves when issues arise.
Reported by crypto.news.
Disclaimer: This article is for informational and educational purposes only, not financial advice. Cryptocurrency assets are highly volatile and carry significant risk. Always do your own research (DYOR) and never invest more than you can afford to lose.
