HONG KONG - Chinese tourists did not rush to ATMs in Hong Kong on Jan. 17 -- the first day they could make withdrawals using yuan-denominated cards -- but retailers nonetheless predict sales will improve by up to 30 percent as a result of the easier access to cash and credit.
China Unionpay Co. Ltd. (CUP), a national payment network used by Chinese banks, worked with the Hong Kong Monetary Authority to establish a system in which Chinese residents can use bank cards and credit cards in yuan issued by Chinese banks for spending in Hong Kong.
The system also allows Hong Kong banks or their subsidiaries to issue yuan bank cards and credit cards to residents of Hong Kong for use on the Chinese mainland. (See related story ATM cards will be interoperable in Hong Kong, China)
According to a report in The Standard, Hong Kong retailers said Chinese tourists were slow to reach for their China UnionPay cards to charge goods or obtain cash.
Pang Yat-ming, assistant manager of Chow Tai Fook Jewelry's Mong Kok branch, said his outlet recorded only one transaction with a yuan credit card on Jan. 17. He said the cool response reflected mainlanders' preference for settling payments by cash regardless of the amount.
"All branches of Chow Tai Fook installed credit card machines one to two months ago,' Pang said. "We have told all staff they should inform the customers, particularly for large transactions, that they can now pay by credit card.'
According to the Standard report, China UnionPay cardholders can withdraw the equivalent of 5,000 yuan (Hong Kong $4,690) through Jetco terminals.
Mainland tourists have been a key to Hong Kong's recovering retail sector since the SARS outbreak crippled sales. The Tourism Board said Hong Kong had 1.69 million arrivals in November -- a 7.3 per cent year-on-year rise, of which 930,432 were mainlanders.
Retail Management Association chairman Yu Pang-chun said he expects retailers will see up to a 30 percent rise in revenue in 2004 with the opening up of the payment system.
China UnionPay Co operates the country's interbank transaction network, with cards approved by the People's Bank of China and co-issued by 88 Chinese financial institutions. It is estimated there are more than 500 million cards in use in China.
Jetco, or Joint Electronic Teller Services, operates an interbank ATM network in Hong Kong, Macau, Zhuhai and Shenzhen. Member banks include Standard Chartered, Bank of East Asia, DBS (Hong Kong) and Bank of China (Hong Kong).
