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Banking & Finance

China’s UnionPay scrambling to sign deals with banks in UK so HSBC cardholders can still use ATMs there after April 1

UK rule change forces China’s domestic bank card organisation to ink fresh agreements with each of 36 banks in network; report says at least 60 per cent of cashpoints will still work for UnionPay users

PUBLISHED : Saturday, 19 March, 2016, 1:15pm
UPDATED : Sunday, 20 March, 2016, 4:20am

HSBC is warning customers in Hong Kong that its UnionPay-backed ATM and credit cards may not work at some cashpoints in the United Kingdom from next month due to regulatory changes there.

To ensure the cards remain valid, UnionPay, China’s only domestic bank card organisation, is now racing against time to sign separate agreements with each of its 36 member banks in the UK of the Link network, as mandated by the amended rules.

Unless more deals are inked by April 1, Hongkongers may find themselves unable to withdraw cash as thousands of people fly to London during the Easter holidays.

The problem will affect at least 27,000 British cashpoints run by Link, which operates a network of 66,700 ATMs.

HSBC warned its customers this week about the problem and recommended they prepare to withdraw cash from its branches in the UK. Other Hong Kong-based banks are thought to be affected, too.

But a spokesperson for London-headquartered HSBC told the Sunday Morning Post yesterday that UnionPay has signed new contracts with operators of 60 per cent of the UK cashpoints.

UnionPay said customers of banks will “temporarily experience interruption” during the Easter holidays. It was unclear whether mainland Chinese users of UnionPay would also struggle to withdraw money in the UK.

HSBC said it could not be sure how many clients would face problems - which include how many intended to travel to the UK. However, the number could easily reach thousands.

HSBC will be keen to avoid a repeat of the problems its customers faced three years ago when the bank switched to chip-embedded cards with UnionPay as the network provider. As UnionPay only worked in a handful of Asian countries at the time, many customers were unable to withdraw cash abroad.

The latest changes come as Britain’s payments regulator ordered a consortium of British banks to sell VocaLink in a bid to boost competition and innovation. The payment systems company processes around 90 per cent of British salaries and handles all UK bank payment transfers.

HSBC said it is working with UnionPay to resolve the matter and has urged the company to sign more agreements before the month is out.

“We take this [change] seriously and we know a lot of our customers travel to the UK on a regular basis and it is important they can withdraw cash as and when they need to,” a HSBC spokesman said.

READ MORE: HSBC to end UnionPay chaos with a new Plus ATM card

Among those affected is British expat Vicky Medcalf, who received notice about the changes from HSBC on Thursday night. Before flying to London next week just days before the changes take effect, she is now trying to obtain a Plus card, a rival to UnionPay run by Visa, but described the process as being “very stressful.”

“I saw a tiny notice on an ATM about the change but it didn’t give enough information, so I tried to find information on HSBC.com.hk and the UnionPay website with no joy. It just said, ‘some ATMs can offer the service’, but didn’t say which ones.”

What can HSBC customers do?

- Customers who only have UnionPay-chipped cards can still withdraw cash from HSBC’s network of 2,000 cash machines in the UK. Details here.

- At least 60 per cent of cash machines in the UK should accept UnionPay from April 1, but no details are currently available on which ATM operators have signed to do so. One way to spot whether the card will be accepted is if a UnionPay logo pops up on the cashpoint screen.

- HSBC customers who use UnionPay-chipped cards can apply for a Plus ATM card to gain access to a broader range of cashpoints in the UK. Customers’ new Plus cards would be linked to the HK$ current account of their HSBC integrated account. Details here.

- HSBC customers can also link their bank accounts to their Visa or MasterCard credit cards, enabling them to use these to access ATMs on the Plus/Cirrus network overseas, including in the UK.