In the new supplement to the Mainland and Hong Kong Closer Economic Partnership Arrangement signed last week, mainland-incorporated banking institutions established by a Hong Kong bank will be allowed to locate their data centers in Hong Kong, subject to certain requirements.
Previously, all overseas banks were required to set up the yuan bank card data base onshore for the sake of security.
For overseas banks such as BEA and Standard Chartered, the launch of the yuan debit card paves the way for yuan credit cards.
BEA plans to issue yuan credit cards on the mainland this year after gaining regulatory approval, Bank of East Asia Chairman David Li said in May. Standard Chartered has already set up a team to prepare for the issuance of yuan credit cards after sending application to regulators for credit cards.
Citibank had already take a shortcut into the mainland's credit card market by teaming up with Shanghai Pudong Development Bank to offer a co-branded credit card.
Overseas banks see the profits potential on credit card business in the mainland ?? the growing middle class, indulging more in western lifestyles, are more used to shopping with their plastic rather than carrying cash.
Attracting Customers
Xu Luode, president of the China UnionPay Co, said the entry of overseas banks into Chinese mainland's bank card market will help improve the industry benchmarks with the offering of more products and services.
The three banks - Bank of East Asia, Standard Chartered and Citibank - went all out to woo local retail clients, including waiving fees, and offering transaction and savings bonuses and discounts on shopping.
The following are the main selling points the three banks offer:
BEA
The bank targets clients with deposits at least 5,000 yuan (US$730).
Fee waivers
Waiver of first annual fee to May 31, 2009.
Waiver of charges for cash withdrawals at BEA (China) ATMs and UnionPay-enabled ATMs until August 31.
