Foreign Bank to Issue First China Debit Card
May 15 – Hong Kong’s fifth-biggest lender, Bank of East Asia, is set to become the first foreign bank approved by Chinese regulators to offer debit card services in the country by next week.
“We will target both our existing customers and new clients (in China) for the local currency yuan-denominated debit card issuance, which will be launched on May 20 in Beijing,” the Bank of East Asia said in a statement.
It added, “The bank has spent a big amount of financial and human resources in the preparations and the data center for the card business will be based in Shenzhen.”
Under Chinese bank card rules, foreign banks should establish IT support and data centers for card operations in a mainland Chinese city and not just operate an offshore data center. Other foreign banks, namely, HSBC, Citigroup and Standard Chartered have also filed similar applications but have yet to complete the process.
Last year, Bank of East Asia, HSBC, Standard Chartered and Citigroup were given approval to launch locally-incorporated businesses. In China, only locally-incorporated foreign banks are allowed to issue debit cards. Otherwise, foreign banks are allowed to release co-branded credit cards through local partners, usually accounts are in both U.S. dollar and yuan-denominated.
Citigroup and HSBC already offer dual currency-denominated credit cards via local banking partners. HSBC’s co-branded credit cards with partner Bank of Communications has already reached more than 6 million while Citigroup’s credit card partner in China is Shanghai Pudong Development Bank.
A bank spokeswoman told Reuters that Standard Chartered will establish a customer data center for its card business in Shanghai by April and is in the final stage of preparations to launch its debit card in the country.
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