Why are there no debit cards in Hong Kong?

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It’s not that there aren’t debit cards in Hong Kong. They’re just not the debit cards you might ex­pect.

Over­seas, debit cards are com­mon­place—linked by

Visa or Mastercard to your check­ing ac­count, and de­duct­ing the cash di­rectly. You can use them in shops, on­line and in­ter­na­tion­ally. Good luck do­ing all that with just your HSBC ATM card. In fact, few banks in the city of­fer the sim­ple, universal debit sys­tems ubiq­ui­tous in the west. Why?

There’s no sin­gle ex­pla­na­tion, but a set of fac­tors unique to the city that have con­verged to pro­duce this some­what less con­ve­nient way of life.

There is a debit sys­tem in Hong Kong, of course:

EPS, founded in 1984 by a con­sor­tium of 21 Hong Kong banks to pro­vide a con­ve­nient, cash-free way to pay in shops and su­per­mar­kets. Cou­ple that with eas­ily avail­able cash­back and the fact that we can pay our bills and even our taxes via EPS in a 7-Eleven, and our debit spend­ing is in fact pretty high: Last year we made 126 mil­lion trans­ac­tions on debit cards in Hong Kong, spend­ing $273 bil­lion on re­tail and bill pay­ments.

Prob­lem is, EPS is exclusive to Hong Kong, so you can’t use it over­seas—and it’s not like you can use it uni­ver­sally in Hong Kong ei­ther. Try pay­ing for a meal at Otto e Mezzo by EPS and you’ll be wash­ing dishes in the kitchen un­til the end of time.

Mean­while in China, the China Union Pay sys­tem rules supreme and is much more widely ac­cepted than Visa or Mastercard. As banks in Hong Kong in­creas­ingly head in the di­rec­tion of that main­land cash, there’s less rea­son for them to want to adopt more western sys­tems.

Then there’s Oc­to­pus: launched in 1997, this pi­o­neer­ing stored-value card is eas­ier to use than any debit card or in­deed cash. And when it’s safe to say that pretty much ev­ery sin­gle per­son in Hong Kong has at least one, and cards can be linked to ac­counts to auto-top-up, the need for an in­di­vid­ual debit card seems less press­ing.

And, of course, there’s this: the banks love credit cards, be­cause you’re pay­ing them huge amounts of in­ter­est for the priv­i­lege of not stump­ing up all the cash up front. When you could charge 35 per­cent APR on some­one’s new Xbox One, would you be in­clined to of­fer them a cheaper, more pru­dent way to spend their cash? Not likely. In this city of fi­nance, ev­ery­one’s got an an­gle—your bank most of all.

So it’s ac­tu­ally Hong Kong’s pi­o­neer­ing use of Oc­to­pus and EPS, the rise of the Chi­nese econ­omy and our own banks which all go to­wards the fact that the western con­cep­tion of debit cards has never re­ally taken off. And that’s not to men­tion that for many pur­chases, the city loves its cold, hard cash—and, as the ads tell us, for ev­ery­thing else, there’s Mastercard.

All cards ac­cepted… ish

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