KYC technology seen as cause for the rise of withdrawals in HK

The recent installation of know-your-customer (KYC) facial recognition technology at over a thousand automated teller machines in Macau could increase cash withdrawals in its neighboring region, according to the Hong Kong Monetary Authority (HKMA).

Cash withdrawals at Hong Kong ATMs have surged, with monthly withdrawals using mainland bank cards ranging between HK2 billion and HK6 billion.

Reuters stated that mainland Chinese customers are withdrawing hundreds of thousands of dollars using up to 50 cards at a time.

The KYC technology was installed to more effectively monitor ATM cash withdrawals by mainland Union Pay cards.

The HKMA is currently monitoring the situation, and declined to comment on media reports claiming that up to HKD20 billion was being withdrawn from its ATMs every month.

"The HKMA is aware of media reports about people using multiple mainland cards to withdraw cash at ATMs in Hong Kong," the central bank said in a statement.

It added that it is "monitoring the situation and is in discussion with the banking industry and the police about this issue."

The HKMA is also in close contact with Macau authorities "on their experiences in the use of facial recognition technology in ATM cash withdrawal," adding that there currently is no plan to introduce the technology in Hong Kong.

Mainland Chinese citizens are only allowed to withdraw a maximum of RMB100,000 a year, regardless of the number of separate bank accounts or ATM cards they own. This is Beijing's latest move to tighten its capital account controls and curb money laundering. Top of FormBottom of Form

The HKMA said that the rule could impact withdrawals in Hong Kong, but also noted that it could be hard for authorities to crack down on mass withdrawals as it is not illegal to withdraw cash from ATMs on others' behalf.

Meanwhile, the Monetary Authority of Macao told Reuters that the measures, introduced at the ATMs in the world's largest gambling hub, had cut cash withdrawals to a "relatively reasonable level."

"Irregular activities have been stopped, promoting the security of the financial system of Macau and having a positive impact on the development of the local financial sector," it said.

Source: Macaudailytimes