Higher banking charges forcing shops to reject payment in 10-cent and 20-cent coins Even millionaires will soon be in trouble if the only money they have in their pockets is 10-cent and 20-cent coins. Squeezed by higher bank charges for deposits of coins, growing numbers of shops and traders are refusing to accept them. Increasing acceptance of Octopus cards by retailers and transport operators is reducing reliance on coins. But in small independent shops and market stalls that do not have smart-card technology, the signs are going up: 10-cent and 20-cent coins not accepted. A South China Morning Post reporter who tried to pay for a HK$2.50 steamed cake at a Quarry Bay bakery with a HK$2 coin and three 20-cent coins was told the shop had not accepted small coins since last year. 'You can give me HK$3, and I can give you 50 cents' change instead,' the saleswoman said. Unlike many stores across the city, the bakery - which prices several cakes and buns at HK$2.50 and HK$3.50 - does not post a notice about its 'policy' outside. Just a few stores away, however, a vegetable vendor displays a notice declaring: 'No 10 cents or 20 cents accepted.' The saleswoman, who wished to be named only as Ms Lam, said they had stopped accepting the small coins because the bank service charge for depositing coins in bulk was too high. In October last year, HSBC imposed a service charge of 2 per cent of the value of deposits of 500 or more coins, with the minimum fee for 500 coins being HK$50. Bank of China (Hong Kong) charges HK$1 for every HK$20 in 10-cent or 20-cent coins deposited, and the same for every HK$50 in other coins. Kwan Yan-wing, owner of a small cafe near Tai Koo, said his eatery would not welcome customers paying more than HK$1 in 10-cent or 20-cent coins. 'We can still put up with small amounts like HK$1 in small change,' Mr Kwan said. 'But it is just too troublesome to have more than that value, and costly to get them deposited in the bank.' Mr Kwan said all items on the menu had been rounded up to the nearest dollar to avoid them having to receive the smaller coins from customers. Traders who refuse to accept small coins are backed to a certain extent by the law. The coinage ordinance allows a person to refuse to accept payment for an item worth more than HK$2 in coins with a face value of less than HK$1 or payment for a HK$100 item in coins of HK$1 or more. Hong Kong Retail Management Association chairman Bankee Kwan Pak-hoo said the association had not heard of members refusing to accept small change, although more shops had begun to accept Octopus cards. Bus companies are handling significantly fewer coins since the Octopus card system was introduced in 1997, following the lead of the two railways. Kowloon Motor Bus and Citybus said about 90 per cent of passengers now paid by Octopus. Many minibus operators are also accepting the cards, as well as major convenience store chains, supermarkets and fast-food chains. The number of coins in circulation has remained steady in recent years as there have not been any new coins produced since 1999. One reason is demand for coins has been largely stable over the years, according to a spokesman for the Hong Kong Monetary Authority. He said 6.3 billion coins were being used in the city by the end of 2005, with 10-cent coins the most numerous, at 1.8 billion. The spokesman said coins, made of brass-plated steel and cupro-nickel, were more durable than banknotes and thus had a longer lifespan. The Octopus Card Company said about 14.7 million cards were in circulation, of which 7 million were in active daily use.