payment services, and iii ) third, we will put in place a robust legal and regulatory framework to manage the risks that may arise from these new technologies. let me elaborate below on the second and third components of this strategy. iii. embracing the m - commerce opportunities in hk 14. talking about m - commerce, i believe that, if there is an “ app ” that would guide market players to search for a place to launch their m - payment business with any of these key words – “ market readiness ”, “ policy support ”, or “ sound regulatory framework ”, the choices to pop up on your app screen would likely include hong kong. let me explain. ( a ) market readiness 15. in terms of market readiness, the relevant statistics clearly indicate that hong kong is ready and willing to embrace m - commerce. according to some research, the market size of hong kong ’ s mobile commerce exceeded hk $ 6 billion in 2012, and is expected to reach near hk $ 18 billion by 2015. 2 16. these online shoppers are well - equipped for mobile payment. the mobile subscriber penetration rate in hong kong, which stood at 237 % as of may 2014, is one of the highest in the world. moreover, many of the new smartphones shipped to hong kong are nfc - enabled. 17. thanks to the promotional efforts of various payment service providers, people in hong kong are very used to making contactless payment. some statistics show that among non - sources : paypal consumer online and mobile shopping insights 2012. bis central bankers ’ speeches cash transactions, the portion of contact - less transactions amounts to about 85 %. 3 with such a technology - savvy population, there is a huge market that m - commerce merchants can tap into. ( b ) policy support 18. now, let me turn to “ policy support ”. development of the policy framework for mobile payment services started a few years back. in 2012, the hkma commissioned a consultant to examine how our city should best embrace the m - payment technology, and promote creativity through competition, while ensuring sufficient protection of the users in terms of prepaid stored value and data security. the consultant made two recommendations. “ soft ” infrastructure – best practices 19. the first one focused on building the critical “ soft ” infrastructure. the consultant suggested that the hkma should work with the industry to develop a set of standards to ensure inter - operability and system security. we agreed on this point, and worked proactive

marketplace, but people don ’ t live there. books can be made digital, but coffee cannot. we still enjoy – and need – physical goods and services. that ’ s why “ m - commerce ” is becoming the “ game changer ”, as it fills the gaps of “ e - commerce ” by making it portable and connecting the virtual world with the real world. 9. furthermore, the penetration power of m - commerce has been significantly boosted by new marketing tools made possible by combining mobile technology with big data analytics. location - based “ push ” marketing and mobile coupons are helping companies to attract new bbc : world ’ s first “ smartphone ” turns 20, aug 15, 2014 ( http : / / www. bbc. com / news / technology - 28802053 ). bis central bankers ’ speeches customers and encourage existing ones to spend more. and all sorts of creative “ apps ” are making the “ matching ” process between buyers and sellers much more fun and efficient. that is the beauty of the “ online - to - offline ”, or “ o2o ” value chain, an increasingly vital element of m - commerce. ii. the hkma ’ s policy objectives towards electronic payments 10. the benefits of m - commerce are not confined to individual companies. from a macro perspective, m - commerce and m - payment will, no doubt, help to enhance economic efficiency by cutting costs of businesses, make the payment process safer, facilitate price discovery of goods and services, and contribute directly to price stability and increased competition. 11. a study conducted by moody ’ s analytics last year estimated that the greater use of electronic payments added nearly us $ 1 trillion in global economic growth over a five - year span between 2008 and 2012. that growth in gdp was equivalent to creating 1. 9 million jobs. 12. in view of the importance of electronic payment, the hkma has carefully considered the approach that it should adopt in view of its dual role both as a regulator and a facilitator to promote a healthy development of electronic payments. 13. in short, we are adopting a three - pronged approach. i ) first, we have made it a priority to promote the further adoption of electronic payment means. this is achieved through projects such as the e - bill platform, which was launched last year, and the e - cheque initiative, which is scheduled to be launched next year ; ii ) second, we will take proactive steps to facilitate the development of mobile