Finance

Service Comparison of 8 Virtual Banks in Hong Kong

Besides virtual insurers like Bowtie in Hong Kong, virtual banks are also available in Hong Kong. Why would you want to use a virtual bank? Let me tell you about my experience opening accounts in all eight of them and comparing their services.

Author Andy Yang

Date 2021-06-21

Updated on 2021-06-21

8 Virtual Banks in Hong Kong Is my money safe in a virtual bank?Open an account is easy What Services do these banks provide?Which Virtual Banks are the best for you? and why?

8 Virtual Banks in Hong Kong

You may enjoy the service of the 8 virtual banks via their apps on Apple App Store and Google Play Store. By visiting their official webpage, you could learn more about their backgrounds, promotions and contact information, etc.

In alphabetical order, the 8 banks are:

Airstar Bank,
Ant Bank,
Fusion Bank,
Livi Bank,
Mox,
Ping An OneConnect Bank,
WeLab Bank, and
ZA Bank.

Is my money safe in a virtual bank?

It is as safe as in other banks in Hong Kong. Like other banks, virtual banks are regulated by the Hong Kong Monetary Authority (HKMA) and are required to have a minimum share capital of HK$300 million. In addition, the HKMA also requires their parent owners to provide additional capital and/or liquidity when such a need arises because digital banks are usually new ventures that may have higher risks.

Open an account is easy

Opening an account is generally easy – you need the relevant app on your phone (they will send you text messages via app to confirm security), your Hong Kong ID, and a well-lit place as they require you to take a photo of your HKID and face. Some of them may ask you to hold your HKID and either tilt it left/right or up/down, and some ask you to put it flat on a surface. They may ask you to move your head from side to side, up and down, blink your eyes, and/or open your mouth as part of the account opening process.

It was easy to open accounts with all the banks except for one.

I had some trouble with WeLab Bank. After trying many times, I contacted them for help and tried different phones, different lighting, and in the end, had to go to their offices to get that opened (they used the latest Apple iPhone and that seemed to do the trick). My son also had some initial trouble opening his ZA account as he laid his HKID flat on a table instead of holding it up (which the bank requires), so it is important to follow the instructions.

What Services do these banks provide?

You may be wondering which bank is best for you? It really depends on what services you need from the Virtual Banks as they all appear to focus on different things.

Here are the services provided by Virtual Banks.

1. Allow Immediate Money Transferral

Transferring money in and out of the virtual banks was generally easy once it was set up. Some of them do not have branch codes which makes it a little more complicated. Yet, FPS is available and the transaction is reflected immediately.

Users should be reminded that a few transactions may be needed when transferring large amounts of money due to the daily limits.

2. Make Easy Payments

Banks such as Livi, Mox, WeLab, and ZA provide different payment gateways to spend money. Some allow you to add a virtual debit card to Apple Pay or Google Pay (ZA only lets you use Apple Pay at the time of writing). Livi uses UnionPay as well. Some (Mox, WeLab, ZA) send you a plastic card to use.

You can check all of your transactions on the app, and they also provide you a statement at the end of each month.

3. Offer Attractive Rebates

These virtual banks usually offer quite attractive rebates to their customers whenever they make transactions. Different forms of rebates and rebates rates may change from time to time and depend on promotions.

Here are some rebates that the virtual banks are offering at the time of writing:

Mox gives you a rebate of 0.5%
Livi gives you (with limits) 8% back for online transactions and 1% for other transactions
WeLab gives you (with limits) 5% for groceries, ridesharing, and dining on weekends
ZA gamifies the rebate and can give you anywhere up to 200% back – my own experience on average is about 1.7% ranging from about 0.5% to 14%.

The rebates for ZA and Mox are immediate while Livi and WeLab pay you the rebates in the following month.

4. Offer High-Interest Rates

Virtual Banks may pay you higher interest rates in HKD compared to your usual bank. If you have spare cash and want to maximise your returns, the following sequence may work for you (depending on how much you have to spare):

$20,000 in Airstar (earns 3.6% p.a. for 95 days)
$20,000 in Ant – open a Libre account (earns 2% p.a.)
$50,000 in Livi (earns 1% p.a.)
$200,000 in ZA (earns 1% p.a.)
$500,000 in Mox (earns 0.65% p.a.)
$500,000 in PingAn OneConnect (earns 0.6% p.a.)
Top up another $980,000 in Airstar (earns 0.5% p.a.)
Top up another $180,000 in Ant (earns 0.5% p.a.)
Top up another $450,000 in Airstar (earns 0.5% p.a.)

The rates change from time to time so please do your own homework before committing.

5. Allow Multi-currency Savings

Airstar, Fusion and ZA provide you with savings accounts in Renminbi (CNY) and US Dollars (USD) if that is something you want. In CNY, the best rate is given by Fusion (1% pa) and in USD the best rate is provided by Airstar (0.10% pa).

6. Good Rates & Multi-currency for Fixed deposits

Time deposits are available in CNY and USD in Airstar, Fusion, and ZA while HKD fixed deposits are available from Airstar, Fusion, ZA, and WeLab.

The tenors vary across banks and depend on the currency.

For example, in Renminbi (CNY), Fusion has good rates at short tenors while Airstar has good rates at longer tenors.
In USD, Airstar gives you good rates.
In HKD, WeLab rates are good but are for 3-month tenors. Otherwise, Fusion gives you good rates.

Which Virtual Banks are the best for you? and why?

So which virtual banks are best for you really depend on your needs.

The top 3 virtual banks by numbers of customers were reportedly ZA, Mox, and WeLab if that helps guide your choice.

I hope the above has been of interest.

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Author

Andy Yang

BEc (Hons), FIAA, FFin, GAICD

With over 30 years of work experience across 7 Asia-Pacific countries, Andy is an actuary who has worked primarily in the investment management and life insurance industries including Chief Investment Officer and Responsible Officer roles. He has had the good fortune to have had a broad range of roles that include pricing, retirement savings, modelling, performance analysis, risk management, portfolio management, M&A, hedging, ALM and product development.

Andy graduated from Macquarie University Sydney with a BEc (Hons). He was recently awarded a Distinguished Service Award by the Institute of Actuaries of Australia.