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Open sesame  | Macau Business

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Six years after an agreement was signed with great fanfare with Alibaba Group to boost the city’s efforts to develop into a smart city, few details are still known about the concrete results of the agreement. Nevertheless, the city’s public services and payment ecosystem have undoubtedly improved

Nelson Moura


It was August 4, 2017, when the Alibaba Group entered into a strategic partnership framework agreement with the Government of Macau Special Administrative Region to support Macau’s transformation into a smart city by using cloud computing technologies in order to bring benefits to both residents and tourists visiting the city.

Six years on and the concrete results of that agreement are still to be determined, with few details revealed either by Alibaba or the Macau government on its achievements. 

The Memoranda of Understanding signed at the time between the then Chief Executive of Macau, Chui Sai, On and Alibaba Group’s Executive Chairman, Jack Ma, promised to leverage the advanced technologies of the cloud computing arm of Alibaba Group in upgrading the IT infrastructure in Macau.

The partnership was divided into two phases, the first spanning from 2017 to 2019, and the second between 2019 and 2021.

Efforts during the first three-year period between 2017 and June 209 would be focused on cloud computing, smart transportation, smart tourism, smart healthcare, and smart city governance, as well as talent development. 

Alibaba was to build a smart transportation network for the city to optimise the management of road, water, and air traffic, making the most effective use of Macau’s transportation resources. 

In order to support Macau in its development of smart tourism, the tech company would also leverage its analysis of visitors and provide target consumer marketing tools, with tourists visiting Macau expected to enjoy insight-driven guided tours, convenient mobile payments, and customised online promotions at the airport, commercial districts, tourist spots, convenience stores, and restaurants.

Concerning healthcare, Alibaba would support Macau in enhancing its electronic medical system and assisting healthcare decision-making through the use of online medical information, while the city’s governance would be improved via the development of a centralised cloud-based platform that connects different government departments to enhance the efficiency of the city’s governance.

As for talent development, Alibaba would launch an Alibaba Cloud IT Certificate programme and a B2B e-commerce training programme with local tertiary educational institutions to support the development of professionals in cloud computing and e-commerce, as well as to identify and nurture promising startups and talented entrepreneurs in Macau. 

First steps

During its first three-year first phase Macau saw Alibaba Cloud apply real-time remote inquiry of traffic flows and bus information on mobile applications as part of ‘smart transportation plans, as well as smart travel, health care, and governance.

Other applications included helping the Macao Government Tourism Office (MGTO) analyse real-time tourist flows during peak hours in order to divert visitors to alternative scenic spots.

The Chinese group also launched the Macau Talent Programme, aimed at providing training programmes for local students and fostering the local technology ecosystem.

At the same time, it established the Hong Kong and Macau Eco Alliance, in order to provide enterprises across different industries with access to Alibaba Cloud’s extensive suite of solutions and international partners.

The administration has completed the construction of a cloud computing data centre here, as well as ameliorating the common access to public services for the public with a single online user account.

The second phase, between July 2019 and June 2021, was supposed to continue optimising the IT infrastructure in the city and to launch projects in the fields of environmental protection, customs clearance procedures, and economic forecasting.

Several of the Phase II projects were delayed due to COVID-19, and the general public does not yet have access to the final evaluations of the projects or the framework agreement that assesses the investment that has gone into them.

Macau Business sent several questions to Alibaba Cloud Macau concerning the different achievements and results of the agreement with the Macau SAR, but a response was not issued before this article was published.

Visible changes

Regardless of the exact objectives of the agreement, one can’t deny the city has grown leaps and bounds in certain areas, namely e-payments and the unified use of public services, with contributions from the mainland tech group.

In September 2020, authorities introduced a central Macau One Account, for which Alibaba provided MOP 100 million (US$12.3 million) for the development of the system.

An upgraded version of the system was unveiled in 2022, providing some 127 public services and touted as a step into better e-governance and ‘Smart City’ development. 

Residents can use the Macau One Account 2.0 version to present valid documents such as driving licences, and with the new version of the Macau SAR Resident Identity Card expected to roll out in 2023 also included. 

Other advances in urban smart city applications in Macau can be seen in transport, with the Bus Travelling System app launched by the Transport Bureau, allowing users to accurately understand how buses operate and schedule.

The app also allows you to see in real-time the impact of construction works on the streets or even if the next bus is full.

In the last three years, the city has gone from a mostly live currency environment to one where, as in the mainland, the average shopper can make most of its payments via phone. 

Much of that change can be attributed to the pandemic and the successive rounds of consumption stimulus packages advanced by Macau authorities, which required local businesses to acquire point-of-sale (POS) terminals for customers to be able to use their allocated government funds for their shopping.

The attributed funds were initially only allocated via consumer cards, but in later stages, residents were allowed to transfer them to their respective MPay accounts.

According to data provided by the Monetary Authority of Macao in 2022, as many as 260 million mobile payments had been made, with some MOP26 billion (US$3.2 billion) spent – a year-on-year increase of about 40 per cent compared to a year earlier and 20 times the volume of mobile payments reported in 2019 before the pandemic.

The introduction of the Simple Pay service in February 2021 – which allows customers to use mobile phones to scan businesses’ QR codes for payment / has also been touted as one of the reasons.

Apart from eight local payment tools, Simple Pay also accepts multiple other payment methods, such as WeChat Pay, Alipay, Huawei Pay – from mainland China; South Korea’s Kakao Pay and Samsung Pay, and Apple Pay.

Offshoots

Affiliates from the giant Chinese e-commerce and tech group have also established roots in the SAR since the agreement was first established. 

In 2019 Macau witnessed the inauguration and operation of its first virtual bank, Ant Bank (Macao) Ltd. with a business scope of providing mobile payment services and financial banking services such as deposit, loan and remittance services to residents and local small and medium-sized enterprises. 

The new bank vowed to provide more innovative financial products to compete with traditional banks, with the city’s regulations later updated to accommodate better supervision of digital banking.

The Macau SAR Financial System Act, enacted in the 1990s, did not specifically set out rules for virtual banking business, but lenders were allowed to conduct online business.

The new bank also allowed Macau residents to own their own Alipay e-wallets for online and offline transactions and eased cross-border payments in Hong Kong and the mainland.

Meanwhile, in 2022, AGTech Holdings, an affiliate of Alibaba previously mainly engaged in China’s lottery market, purchased Macau Pass Holdings for HK$778 million.

At the time, the move was touted as a step in reinforcing the local mobile financial infrastructure’s interconnection with the Greater Bay Area.

Alibaba Group and Ant Group jointly hold approximately 55 per cent of AGTech’s equity, with Macau Pass now an indirect wholly-owned subsidiary of AGTech, which also indirectly owns 33.3 per cent of Ant Bank (Macao) Limited.

The cumulative number of Macau Passes issued had exceeded 4.5 million as of the end of 2022, while registered MPay users accounted for over 90 per cent of the local population.

Since October 2022, MPay has been officially connected to Taobao Macau, and authenticated users can directly use MPay to pay in the pataca when shopping online.

The app also allows for the payment of certain local daily use expenses, such as utility bills, property management, parking, and transport.


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