Japanese Business Perspectives: Integrating Regional Payment Solutions via the Hong Kong Hub | HKTDC Research

Learn our business perspective being a Japanese company on HKTDC Research - how NTT DATA harnessing the power of Hong Kong as a Commercial Hub.

Interview by HKTDC Research with Atsushi (Ash) Kato, Head of Corporate Office, NTT DATA Hong Kong Limited.

Fuelled by the post‑pandemic economic recovery, digital transformation and trade liberalisation under free‑trade agreements such as RCEP, the rapid expansion of the Asia‑Pacific internet economy has led to a surge in demand for digital payment solutions. A 2021 report by Google, Temasek and Bain and Company estimated that, in Southeast Asia alone, the online payments market will grow by 13% each year (compounded annually) between 2021 and 2025, reaching a gross transaction value (GTV) of over US$1.16 trillion. In the same survey, 72% of digital merchants said they were likely to increase their digital payments usage by 2023.[1]

As an international financial centre, Hong Kong’s highly developed financial infrastructure, dynamic fintech scene and welcoming business environment can offer companies such as NTT DATA opportunities to build a competitive advantage in the digital payments industry.

In an interview with HKTDC Research, Atsushi (Ash) Kato, Head of Corporate Office, NTT DATA Hong Kong Limited, highlighted Hong Kong’s key role in integrating the Japanese company’s cross‑border payment networks across the Asia‑Pacific region, and shared his views on Hong Kong’s current position and its future as an international financial centre and business hub.

Integrating regional payment networks

Headquartered in Tokyo, Japan, NTT DATA Corporation is one of the world’s largest information technology (IT) services companies, offering system integration, IT consulting and other IT services. It is a leading payment systems provider in Japan with more than 30 years of experience, and began expanding its overseas payment services in 2010.

NTT DATA Hong Kong (NTT DATA HK), a subsidiary of NTT DATA, was established in 2015 to provide global digital payment services, with a focus on the Asia‑Pacific region. NTT DATA’s integrated platform allows merchants to process payments via local and regional payment methods in over 150 currencies. The Hong Kong office serves as the key hub for the company’s payment processing and management, integrating its cross‑border payment network with offices across Japan, ASEAN, India, mainland China and Hong Kong. Kato explained that the Hong Kong office acts as a platform for the company’s global expansion plans, saying: “Asia is the fastest‑growing market, especially for cross‑border payments, so setting up here in Hong Kong gives us exposure to all these opportunities."

Finance and data management hub

Kato highlighted some of Hong Kong’s key strengths as a business location, saying: “As an international financial hub, Hong Kong boasts free flows of capital,low transaction costs and an open foreign exchange market. With data analytics becoming the centrepiece for fintech and strategic planning in recent years, Hong Kong has also demonstrated security for data flow and storage. These are all very important factors for businesses like ours, with a long‑term vision to build a strong network and presence across the Asia‑Pacific region, utilising Hong Kong as one of the major regional business hubs.”

Kato also pointed out that Hong Kong’s sound regulatory framework is highly valuable to fintech companies like NTT DATA HK, saying: “The regulations in Hong Kong have a track record of being clear and consistent, and changes are communicated clearly. The solid groundwork helps build confidence in a dynamic industry.” He believes that Hong Kong is one of the outstanding locations in Asia in this respect, which explains why financial institutions and fintech companies such as NTT DATA have set their sights on Hong Kong as a hub and launchpad for their business. Kato added that with Hong Kong’s well‑connected location, at the heart of the Asia‑Pacific region, is another major factor in the city’s strategic value, saying: “Compared to other locations in Southeast Asia, Hong Kong is closer to Tokyo. For us, this is absolutely beneficial for frequent business travel.”

Looking towards the future

Kato outlined his confidence in the future of the Asia‑Pacific digital payments market, saying: “The e‑commerce market is massive and fast‑growing, and competition is keen. As merchants extend their reach beyond regional borders, and customers seek alternative and more convenient payment methods, we have been seeing a strong and steady rise in demand for payment acceptance and processing capabilities in the Asia‑Pacific region, particularly in Southeast Asia and India. We in Hong Kong have been working closely with our partners and sister companies to capitalise on these regional opportunities.”

Kato called on Hong Kong to continue to actively promote new business opportunities, saying: “The pandemic has accelerated digitalisation in many industries, especially impacting those that have been largely offline traditionally. We look forward to facilitating their payment transformations and helping companies emerge stronger. Introducing start‑ups in Hong Kong, for example, and facilitating communication between local and overseas companies, would be very helpful for businesses like NTT DATA HK that are eager to explore new possibilities and business ventures.” Regarding the possible impacts of RCEP, which came into force in January this year, Kato said: “Right now we are reading into the implications and following the developments. One of the difficulties of cross‑border payments is that we have to follow the domestic regulations country‑by‑country, so I think having consistent policies, regulations and standards across the region should benefit us and all of our merchants.”

[1] Google, Temasek and Bain & Co., e-Conomy SEA 2021 - Roaring 20s: The SEA Digital Decade, November 2021.

This article was first published by HKTDC Research on 9 August 2022. Click here to find out more.
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