Green lights for Ant Financial and Tencent in Hong Kong

This step will help the companies bounce back from an earlier setback to their growing payments businesses. Chinas central bank in July banned people who didnt own a mainland bank card from storing money in Ant Financials Alipay or Tencents WeChat Pay accounts, depriving them of a large potential customer base of overseas Chinese.

But the Hong Kong Monetary Authority has now granted approval for users in the city to store money in the local version of their online wallets.

Zhejiang Ant Small & Micro Financial Services Group, which is trying to expand globally from India to Germany, is using Hong Kong as a test lab before building an overseas presence.

Alipay, which currently has more than 1 million users in the city, has to date convinced more than 6,000 merchants from Ocean Park to Starbucks to accept Alipay.

Apart from cards, Hong Kong shoppers previously could buy pre-paid Alipay cards from convenience stores, convert their cash into yuan, then deposit in Chinese online accounts.

The HKMA, the citys de facto central bank, has granted five stored-value facilities licenses in total, allowing cards or online accounts to be loaded directly in the local currency. HKT Payment, Money Data and TNG (Asia) also won licenses, the authority said in a statement.

Ant Financial is controlled by Alibaba Group Holding co-founder Jack Ma. Its Alipay service is accepted by more than 70,000 off-line retailers in over 70 countries and regions, the company said in an e-mailed statement in July, reports Bloomberg.