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Jake Van Der Kamp

Hong Kong’s ATM network has been hit with a surge in withdrawals by customers using Chinese UnionPay bank cards in the wake of facial recognition technology being introduced at cash dispensing machines in Macau. -- SCMP, August 21
The most interesting thing about this story is that the Hong Kong Monetary Authority (HKMA) is running scared of telling us anything about it.
Our reporter quoted a spokeswoman for the HKMA as saying that the regulator is “not in a position to comment on any dialogues of a supervisory nature.”
What dialogues? It’s a simple matter of confirming whether this surge in ATM withdrawals is actually happening as, wonder of wonders, Macau goes tighter on cash withdrawals than Hong Kong. Don’t tell me that the HKMA does not know whether it is happening.
Read: Some Macau cash points deserted as face recognition technology kicks in at ATMs
I gather from this mention of “dialogues”, however, that the HKMA has already been telling our commercial banks to put a stop to it, and the banks have replied that they cannot do so without shutting down the entire ATM network, which would bring chaos to our payments system.
The HKMA’s difficulty, of course, is that it dare not admit publicly that our banks are subverting Beijing’s restrictions on capital outflows, although it has been happening for the last 150 years.
So they just play dumb. They are otherwise positively garrulous on matters of a “supervisory nature.”
But I also understood that the authorities in Beijing have been congratulating each other at having stopped the outflow. The benchmark they use to measure it, the total holding of foreign reserves, has gone up slightly in recent months.
This is mostly a valuation anomaly. Beijing reports its foreign reserves in US dollar terms and the US dollar has been down this year against most of the world’s currencies. Those holdings of the reserves not denominated in US dollars have therefore risen in US dollar terms. Call it smoke and mirrors.
But it is not true anyway that the outflow has been stemmed. It’s simply covered by a merchandise trade surplus still running at US$460 billion a year.
All of this surplus has gone straight back out of the country again, which is why the level of foreign reserves has gone up only very slightly.
One particular anomaly worth noting here is the drain on the tourism account, now showing a net outflow of US$235 billion a year. They like to pretend in Beijing that this is just a matter of many more mainland tourists wanting to see the world, but there is more to it than that.
The anomaly is that spending per outbound tourist is now running at US$2,000 per trip, more than double what it was seven years ago and, no, it is not because inflation has been particularly unkind to tourist knick-knacks, or that mainland tourists have suddenly begun to scatter money wildly as never before.
My guess is that at least US$90 billion a year of it right now is just money squirrelled abroad. It is ordinary individuals taking cash out of Macau ATMs, and now coming to Hong Kong to do it because Macau has convinced them that it can identify them through facial recognition technology.
I wonder whether the technology really works that well, or works at all, when faced with a hat, sunglasses and a medical mouth mask. I think it’s a bluff.
But this doesn’t matter. It has scared the visitors and we in Hong Kong cannot scare them the same way, as our ATM network does not have this miracle technology.
So now they come here, which means that the next time Beijing develops a capital outflow scare, which it will do again as certainly as the tide rises and falls, the HKMA will have to explain why it is acting for two systems when it should now be acting for one country.
Not in a position to comment, you know.


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Banking & finance

Facing an inconvenient truth, Hong Kong’s monetary authority chooses to stay mum

scmp

Imagery captured from a customer identification camera is displayed on the monitor of an automated teller machine (ATM) equipped with facial recognition software in an arranged photograph taken in Macau on Thursday, May 25, 2017. Chinese bettors withdrawing money from some ATMs in Macau need to do more than punch in their PIN code. They also have to stare into a camera for six seconds so facial recognition software can verify their identity and help monitor transactions. Photo: Bloomberg

Facial recognition at Macau ATMs goes live in bid to stem capital flight

A customer identification camera is displayed at an ATM equipped with facial-recognition software in Macau. Photo: Bloomberg

Imagery captured from a customer identification camera is displayed on the monitor of an automated teller machine (ATM) equipped with facial-recognition software in an arranged photograph taken in Macau, China, on Thursday, May 25, 2017. Chinese bettors withdrawing money from some ATMs in Macau need to do more than punch in their PIN code. They also have to stare into a camera for six seconds so facial-recognition software can verify their identity and help monitor transactions. Photographer: Billy H.C. Kwok/Bloomberg

Hong Kong ATM network sees surge in China UnionPay withdrawals following facial recognition move by Macau

There has been a sharp rise in cash withdrawals in Hong Kong using China UnionPay bank cards. Photo: David Wong

A mirror and a customer identification camera sit on an automated teller machine (ATM) equipped with facial-recognition software at a bank branch in Macau, China, on Thursday, May 25, 2017. Chinese bettors withdrawing money from some ATMs in Macau need to do more than punch in their PIN code. They also have to stare into a camera for six seconds so facial-recognition software can verify their identity and help monitor transactions. Photographer: Billy H.C. Kwok/Bloomberg

Hong Kong Monetary Authority mulls using facial recognition and fingerprint technology in ATMs

Security boost follows Macau’s adoption of the technology, amid central government worries over financial crime

Norman Chan said the HKMA was ‘merely studying this new technology’. Photo: Felix Wong

Macau casino operator Melco Crown steps up security against banned customers with facial recognition technology

Hard Rock Casino, the 420,000-square-foot casino with approximately 520 gaming table and approximately 1,350 gaming machines at City of Dreams, the latest Melco Crown Entertainment Ltd. gaming resort in Macau that opens today. 01JUN09

Babylon Casino, next The Harbourview Hotel at Macau Fisherman's Wharf in Macau. 11FEB15

Melco Crown’s Hard Rock Casino at City of Dreams. Photo: Dickson Lee/SCMP

Macau casinos, major Hong Kong companies look at facial recognition

NEC's Kelvin Chan Wai-kei, Elsa Wong Yuk-kuen. Photo: May Tse

Business

Banking & Finance

Money

Money News

China Business

News

Hong Kong

Hong Kong Economy

Opinion

Hong Kong Monetary Authority (HKMA)

Regulation

Macau

Expresses the views, ideas and conclusions of the author. (Eg. Enough of Crazy Rich Asians, think of crazy poor Hongkongers.)


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