Five Hong Kong banks signed memorandum of understanding with China UnionPay Co Tuesday, the operator of a bank card network in China's mainland, to issue renminbi-denominated credit card in the special administrative region.

The SAR card issuers, which have become members of China UnionPay, include the Hongkong and Shanghai Banking Corp, Standard Chartered Bank, Hang Seng Bank, the Bank of East Asia and Bank of China (Hong Kong) Ltd.

It will be the first time that overseas banks will issue renminbi bank cards when the five banks offer the service later this year.

The banks will issue to Hong Kong residents renminbi credit cards bearing the CUP (China UnionPay) logo, which will be accepted by merchant outlets serviced by CUP and automatic teller machines with the CUP logo in China's mainland, according to the MOU.

"In light of the flourishing economy and growing tourism between China's mainland and Hong Kong, the well-developed cross-border payment system operated by CUP will provide new business opportunities for the SAR banks," said Mok Wai-kin, managing director and general manager of Hang Seng Bank.

Most of the five banks said that they will connect their networks of point-of-sales machines in Hong Kong with China UnionPay in the middle of next month and start to issue renminbi credit cards after May.

Meanwhile, the issuance of renminbi credit cards in Hong Kong is the last of the four renminbi services that the SAR banks are allowed to conduct from the beginning of this year.

The four services, honored by the mainland and Hong Kong Closer Economic Partnership Arrangement, are renminbi deposit-taking, remittance, conversion and issuance of credit card.

The People's Bank of China, the central bank, allowed mainland residents to use renminbi bank cards in Hong Kong from January.

The total amount of spending by mainland tourists in Hong Kong hit 54 million Hong Kong dollars (US$6.51 million) in the three weeks to February 7.

(eastday.com April 7, 2004)