The Hong Kong Monetary Authority (HKMA) on Friday said it has fined WeChat Pay Hong Kong for failing to prevent risks associated with the financing of terrorism and money laundering.

Following an investigation, the digital wallet service provider was ordered to pay a penalty of HK$875,000.

In a statement, the authority said WeChat Pay Hong Kong does not have a robust system for conducting customer due diligence reviews upon incidents that pose a risk of money laundering or the financing of terrorism.

HKMA executive director Raymond Chan urged mobile wallet service operators to strengthen their due diligence procedures.

"SVF (Stored Value Facilities) licensees should apply enhanced due diligence measures on their customers in situations involving potentially high risk of money laundering and terrorist financing," Chan said in a statement.

"These enhanced due diligence measures should be effective in ensuring that the associated money laundering and terrorist financing risks are properly managed."