This account is one of those where the reader can be left shaking his or her head and asking themselves “why would that happen”? But indeed, apparently because of an impending regulatory change in the UK, driven by a forced sale of Vocalink (although there is no real detail provided), some Hong Kong-based UnionPay (the China cards scheme) cardholders may be left without cash access in the UK at ATMs and other cashpoints connected to the Link network. HSBC seems to be trying to get out in front of this possibility by advising their UnionPay scheme cardholders before they fly to the UK for Easter holidays. They key date is April 1, when it seems UnionPay needs to have completed new legal agreements with all of their UK member banks, although specific reasons are not explained. Other banks may also be affected, but HSBC is being proactive, in part seeking to avoid similar Hong Kong embarrassment from an incidence in 2013 involving issuance of UnionPay chip cards.
“HSBC will be keen to avoid a repeat of the problems its customers faced three years ago when the bank switched to chip-embedded cards with UnionPay as the network provider. As UnionPay only worked in a handful of Asian countries at the time, many customers were unable to withdraw cash abroad.”
Although this could affect both debit and credit cards, most people do not take cash advances from credit cards due to the high interest rates. So in effect this is a really just a potential debit card problem. It would appear the impact may be minimized by aggressive deal signing by UnionPay. The article goes on to explain other steps that HSBC customers can take, such as applying for a Plus ATM card, but it all seems so convoluted for something that should be a seamless transition. Of course, HSBC and other customers could still get cash the old-fashioned way, by standing in queue at a high street branch. Wouldn’t that be fun.
Overview by Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service at Mercator Advisory Group
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