Macau Business magazine | July 2026
Macau Business magazine l July 2026 | Special Report | E-payment Spree
Terence Lai is an Associate Professor at Macao Polytechnic University, where his research focuses on technology-driven business innovation and digital systems. With electronic commerce, systems engineering, and intelligent technologies as his core areas of expertise, Professor Lai is a prominent voice in discussions surrounding e-payments, digital consumption, and the evolution of the digital commerce ecosystem in China and Asia. His work seamlessly bridges a technical engineering background with a pragmatic approach to the digital economy and business development.
What are the distinctive characteristics of Macau as an electronic payments market?
Terence Lai – Macau SAR’s level of e-commerce and electronic payment usage strongly parallels that of mainland China and the Greater Bay Area; however, the city’s distinct financial environment has introduced technical complexity. As opposed to being completely RMB-oriented like mainland China, Macau commonly uses three currencies — MOP, HKD, and RMB. This forces payment platforms to provide real-time foreign exchange opportunities and use multi-currency wallets in order to allow tourists and cross-border customers to transact easily with little disruption. However, it also introduces exchange rate risks and spreads that affect how quickly a user will adopt a payment platform. Under Macau’s Legal System for the Issuance of Currency (Law 10/2023), only the Macanese Pataca (MOP) is the legal tender of the territory. Despite the MOP being the official currency of Macau, merchants are able to accept payments in either HKD or RMB at the point of sale but are required to conduct their settlement in MOP. This requires payment processors to build out sophisticated clearing-house operations and utilise hedging techniques to mitigate foreign exchange volatility, creating a more complex technical environment than that of the surrounding cities.
MPay: A concentrated market structure
Macau Pass helped shape the history of e-commerce and digital payments in Macau, but some point to constraints caused by a quasi-monopoly. What is your view on this market dynamic?
T. L. – Macau Pass shows that original infrastructure can take on quasi-monopoly characteristics as a market evolves. The very first phases of the business in Macau were open to competition, but the small population and limited number of transactions created significant natural barriers to entry. By utilising the concept of network externalities and embedding themselves in the transportation and retail ecosystems, Macau Pass created path dependency for consumers and merchants. Through a proprietary QR standard and settlement process, they have also created technical lock-in for all parties, thereby discouraging potential competitors from investing in new, parallel systems. While not technically a monopoly, the first-mover advantage, government support, and the high capital expenditures (CAPEX) necessary to enter the market have created a concentrated market structure.
The pandemic as a ‘demand shock’
Is it fair to say that the government anticipated residents’ appetite for digital commerce and adapted swiftly to this new reality?
T. L. – Macau’s local government has shown effective responsiveness to its citizens’ desire for digital commerce. They used subsidies and Small and Medium Enterprise (SME) training to lower onboarding costs and accelerate the adoption of digital commerce. They did this by using the COVID-19 pandemic to generate a “demand shock” through electronic consumer vouchers and digital retail incentives, which resulted in QR payment acceptance becoming “normal” as a payment method. Most importantly, the local government aligned Macau’s electronic commerce ecosystem with Greater Bay Area (GBA) initiatives. This resulted in QR payment interoperability with AlipayHK, WeChat Pay, and UnionPay QR, which required the harmonisation of Anti-Money Laundering (AML) and Know Your Customer (KYC) standards across different jurisdictions, alongside investment in cross-border electronic commerce hubs and live-streaming commerce centres, thus interconnecting Macau within the broader Platform Economy.
“e-MOP could transform Macau’s payments ecosystem”
Do you believe that the introduction of central bank digital currencies, such as the e-MOP, will help overcome the current stagnation in e-payment growth?
T. L. – A digital currency such as the e-MOP has the potential to break the stagnation of e-payment usage by reducing transaction fees and helping to foster competition. Digital currencies like the e-MOP are typically government-backed and use a not-for-profit model that creates lower costs than comparable private intermediaries. By embedding QR capabilities into the “Easy Transfer” (過數易) solution, we create a two-rail payment system between public and private platforms, which increases the efficiency and scalability of both. Beyond retail payments, the e-MOP could expand into utilities, taxes, and welfare payments for a much broader range of uses. In order for cross-border integration to occur between the e-MOP and the digital RMB (e-CNY), there will need to be two sets of (dual) central bank digital currencies (CBDCs) developed with common protocols, a common regulatory framework, and a common clearing-house platform to facilitate the processing of payments across borders. The level of use of the e-MOP will depend on agreements reached regarding organizational trust co-operation, data privacy procedures, and adequate AML monitoring. If successfully implemented, the e-MOP could transform Macau’s payments ecosystem to leverage the position of Macau as an integral and competitive part of the financial infrastructure in the Greater Bay Area and the Guangdong-Macao In-Depth Cooperation Zone in Hengqin.
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