Banking services in Hong Kong Credit card – past, present and future.
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Transcript of Banking services in Hong Kong Credit card – past, present and future.
Outline
1.Introduction of Credit Card
2.History of Credit Card
3.Master Card vs. Visa Card
4.Types of Credit Card
5.Service/ Discount of Credit Card
6.Comparison of the service fee of different banks
7.Future Trend of Credit Card
History of Credit Card
Concept of using a card for purchase-Edward Bellamy( 貝拉密 ) and described in his utopian( 烏托邦 ) novel Looking Backward( 《回顧》 )
-published in 1887
Concept of paying merchantsusing a card-Ralph Schneider and Frank X. McNamara-Diner Club
Popularize of Credit Card-First Credit Card: 1920’s, in United States-1938: more and more companies accept using credit card
Great Changes of Credit Card-Bank of America -->BankAmericard
-MasterCard-->MasterCharge
-Barclaycard in the UK launched the first credit card outside of the US
Design of Credit Card-become more and more important
“ tangible item/service: price, tangible item/service: price, tangible item/service: price, intangible item/concept: priceless. There are some things money can't buy. For everything else, there's MasterCard. ”
MasterCard Worldwide • owned by the over 25,000 financial institutions
• created by
~ Wells Fargo
~ Crocker National Bank
~ The Bank of California
in 1967
Card Issuing Bank - cardholder’s financial institution
- licensed member of MasterCard.
Cardholder- solicited, screened, and approved by the issuer
- issues the bankcard.
Merchant- wants to accept cards for payment
- meet the qualification standards Acquirer - licensed member of MasterCard
MasterCard- provide services to consumers and merchants.
How MasterCard Works?
Merchant Acquirer MasterCardNetwork
Issuer Cardholder
Transaction beings
The Cardholder purchases services or goods from merchant
Authentication
The merchant, in effect, sells the transaction to the “acquirer” and is reimbursed the amount of the sales ticket less a “discount fee”
Transaction submitted
The acquirer submits the transaction to the issuing bank for paymentvia the MasterCard interchange and settlement system.
Merchant payment
The issuing bank pays the merchart acquirer, less and interchange fee which partially reimburses the issuer for its expense, through theMasterCard settlement system
Cardholder payment
Finally, the cardholder repays the issuer for the goods or services originally purchased from the merchant
What is VISA?
• The Visa International Service Association
• economic joint venture
• 21,000 financial institutions
Hot topic:
• Account Compromise in USA
• the breach of data security at US-based processor Card Systems Solutions Inc (CSI)
• 40 million cards across all payment brands • 205,000 were Visa cards
What can prevent this from happening again?
• Account Information Security (AIS)
• Risk Management program sponsored by
Visa and run by Visa's members
Types of Cards--3 main types in Hong Kong
According to the card organization: Mastercard, American Express card
According to credit rank: the classic card (Sometimes the ordinary card is called silver card), the gold card, the platinum card, the premier card
According to cardholder's status: individual card, official business card, company card
Ways to Attract CustomersHSBC and Hang Seng Bank: discount in different shops
Citibank: Free Gifts
Da Sang Bank and Bank of China: Attractive appearance
Why credit card become so popular in Hong Kong?
-For Merchants: can receive money from the bank immediately
-For Cardholder: can get the product at once and pay it a month later can pay it by installment just bring a card and go out
-For Bank: earn commission earn interest
-More and more banks exempt the annual fee
The comparison of different items of credit card from banks• Bank of China (Hong Kong) ( 中國銀行 ) • DBS Bank (Hong Kong) Limited ( 星展銀行 )• Hang Seng Bank Limited ( 恆生銀行 ) • The Hong Kong and Shanghai Banking Corporati
on Limited (HSBC) ( 匯豐銀行 )• Wing Lung Bank Limited ( 永隆銀行 ) • Chong Hing Bank Limited ( 創興銀行 ) • Standard Chartered Bank (Hong Kong) Limited
( 渣打銀行 )
The comparison of different items of credit card from banks• the accessibility of finding information
• annual fee
• over credit limit charge
• lost card replacement fee
• late fee
• the interest rate of cash advance ( 現金透支 )
• request copy of card statement fee
The accessibility of finding information
• The promotion leaflet only state the advantages of applying the card
• Need to get the details
• Easiest: Hang Seng
• The most difficult: DBS
Annual feeHSBC Hang
Seng Bank
Bank of
China
Standard Chartered
Bank
DBS Bank
Chong Hing B
ank
Wing Lung Bank
HK
$220
HK
$240
HK
$220
HK$250 HK
$250
HK
$220
HK
$220
HK
$110
HK
$120
HK
$110
HK$125 HK
$125
HK
$110
HK
$110
Over credit limit charge
HSBC Hang Seng B
ank
Bank of
China
Standard Chartered
Bank
DBS Bank
Chong Hing B
ank
Wing Lung Bank
HK
$130
HK
$130
HK
$100
HK$130 HK
$100
HK
$120
HK
$150
Lost card replacement fee
HSBC Hang Seng B
ank
Bank of
China
Standard Chartered Bank
DBS Bank
Chong Hing B
ank
Wing Lung Bank
HK
$100
HK
$100
HK
$100
HK$30 HK
$100
HK
$50
HK
$100
Late fee
HSBC Hang Seng B
ank
Bank of
China
Standard Chartered
Bank
DBS Bank
Chong Hing B
ank
Wing Lung Bank
5%(HK$130
-HK$200)
5%(HK$130
-HK$200)
5%(HK$130
-HK$200)
5%(HK$130
-HK$200)
HK
$150
5%(HK$100
-HK$200)
5%(HK$130
-HK$200)
The interest rate of cash advance
HSBC Hang Seng Bank
Bank of China
Standard Chartered Bank
DBS Bank
Chong Hing B
ank
Wing Lung Bank
28.52% 24% 30%
(min. $5)
34.2% 30% Visa: 36.79%
MasterCard:
35.89%
36.47%
Request copy of card statement fee
HSBC Hang Seng Bank
Bank of
China
Standard Chartered Bank
DBS Bank
Chong Hing B
ank
Wing Lung Bank
HK$30
@Page
Latest 3 months:
fee of charge
HK$50
@cycle
HK$50
@page
HK$30
@page
HK$50
@cycle
HK$50
@cycle
HK$50
@page
The future trends of credit card
• counterfeit banknotes
• cashless society
• the weakness of the credit card
• embedded an integrated circuit