Caixin
Dec 22, 2020 07:30 PM
FINANCE

Tencent-Backed Virtual Bank Opens for Business in Hong Kong

What’s new: Fusion Bank Ltd. has become the last virtual bank to officially open for business among the eight companies granted virtual banking licenses in Hong Kong last year, according to its Monday statement.

Backed by internet giant Tencent Holdings Ltd., Fusion Bank is the first virtual bank in Hong Kong to connect with WeChat Pay, allowing customers to use their bank accounts to pay and receive money via Tencent’s ubiquitous mobile payment platform.

Fusion Bank also said it is Hong Kong’s first virtual lender to offer foreign exchange trading, which covers Hong Kong dollars, the Chinese yuan and U.S. dollars.

What’s the background: Long before starting a pilot for selected customers this September, Fusion Bank obtained a license in May 2019 when the Hong Kong Monetary Authority said that the bank intended to launch its services in around six to nine months.

In March, ZA Bank Ltd., whose shareholders include affiliates of internet giants Tencent and Alibaba Group Holding Ltd., became the first player to serve the public in Hong Kong’s virtual banking market, followed by Airstar Bank Ltd., backed by smartphone-maker Xiaomi Corp.

The rollout of virtual banking operations in the Asian financial hub has lagged behind schedule due to an extended assessment period, disruption caused by the Covid-19 pandemic, and concerns over technology safety and virtual lenders’ impact on their traditional peers, as well as a lack of talent.

Quick Takes are condensed versions of China-related stories for fast news you can use. To read the full Caixin article in Chinese, click here.

Related: In Depth: Virtual Banks Pick a Tough Time to Launch in Hong Kong

Contact reporter Luo Meihan (meihanluo@caixin.com) and editor Heather Mowbray (heathermowbray@caixin.com)

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