Hong Kong students and first-time jobholders who bemoan the difficulty of obtaining a credit card from banks in the city can now turn to Neat, a local start-up that approves prepaid credit cards for users instantly through facial recognition technology. Neat, which started launching its cards in early December, aims to fill the gap that traditional financial institutions have created because students and first-time jobholders often lack a credit history and can be perceived as “unprofitable” for banks. “We are targeting the millennial demographic, students or young professionals who ... don’t necessarily qualify for a credit card because they don’t have a credit history, or might not want a credit card because they’re afraid of getting into debt,” Neat’s chief executive David Rosa said. “For this group of people, if they cannot have a credit card, it’s difficult to shop online ... It limits their financial freedom.” One problem was that banks in Hong Kong did not offer a debit-card solution, Rosa said, because debit cards were less lucrative than credit cards when it came to the interchange fee. Interchange fees are transaction fees charged to the merchant when a customer uses a credit or debit card to make a purchase from their store. “The interchange fee for credit cards is much higher than for debit cards, and for credit cards there is interest when you forget to pay or can’t pay your bill,” Rosa said. “So there is little incentive for banks to offer a debit card.” With Neat, users simply download the app, fill in their details and upload a proof of address and a photograph of their passport details page, which is scanned to verify authenticity. The Neat app then prompted users to take a “selfie” to verify that the person applying for the account was the same person whose picture was in the passport, Rosa said. If all the details line up, users are then immediately issued a virtual “prepaid credit card” that they can start using for online purchases while they await the actual card to be mailed to them within about a week. Money can be added to the Neat card by depositing cash at more than 200 Bank of China cash deposit machines around Hong Kong or by doing an online transfer to a designated bank account. The money would be added to the user’s prepaid card within less than one working day, Rosa said. The company also plans to roll out a feature this year that allows users to link their bank accounts to the Neat app so that they are able to top up their credit cards directly. Neat also helps users stay on top of their spending by automatically categorising their spending. Users can see the amount of money they have spent in categories such as food, entertainment and travel for each week, month or year. The app also allows users to control the status of their Neat credit card in such a way that if they misplace their card, they can simply disable it through the app to prevent fraudulent spending while awaiting a replacement card.