Visa to offer debit cards in Hongkong
HONGKONG is a step closer to the cashless society with the introduction of an instant debit card, called Electron, by Visa International.
Being the first of its kind in Hongkong, Electron card holders will not need to carry bulk cash or cheque books around as the card works like a plastic cheque which is accepted internationally.
Those who are not eligible for a credit card will be able to share the convenience of paying by plastic, and do not need to worry about over-spending or forgetting to settle an account and being hit by high interest charges.
Aiming to replace cheques and cash, Electron provides instant debits for point-of-sale purchases made at any shops showing the Electron logo.
It also serves as a bank card enabling card holders to withdraw cash at Visa ATMs (automatic teller machines) anywhere in the world.
Though it looks like a credit card, Electron does not provide credit. Instead, it gives direct access to card holders' current or savings account.
The amount that can be spent depends on the balance in the account, and transactions are completed within 24 hours.
''Debit cards are an important option for those who prefer to pay immediately for their purchases yet require the convenience and flexibility of an international card,'' said Visa International Asia-Pacific region senior product manager Andrew Mainprize.
The card combines the convenience of a credit card with the function of an ATM card and cheques.
''As a PIN [Personal Identification Number] has to be used for every transaction, Electron is also an extremely secure card,'' Mr Mainprize said.
Visa International has previously issued similar debit cards in Hongkong, called Visa Debit, operated on an off-line basis.
That means no on-line instant authorisation from the bank is possible. Electron will be an improvement on Visa Debit.
''Electron has similar benefits to Visa Debit, available in Hongkong for four years, but is a fully electronic version that enables the deduction of purchase charges normally within 24 hours,'' Mr Mainprize said.
The company is currently staging a roadshow to launch the new product in regional markets including Australia, New Zealand, Singapore, Malaysia and Taiwan.
Member banks of Visa in Hongkong have been approached to consider both accepting these cards and ultimately issuing them.
''From a banker's point of view, those customers who are not eligible for a credit card can be retained by offering them Electron. That might bring potential future business for the banks,'' he said.
He said only about 60 to 65 per cent of banks' customers are eligible for credit cards.
This would leave a market of 35 to 40 per cent of customers to be introduced to Electron.
Mr Mainprize estimates that in the next two years, 20 million new Electron cards will be issued.
At present, about eight million cards are in issue around the world.