HSBC launches digital red packets for Chinese New Year, India's demonetization drive reveals mystery mismatch and Australian consumers turn away from credit card spending.
China's traditional red packets given away every Lunar New Year may soon be obsolete. The Chinese Year of the Rooster may soon be ushered in with digital red packets, the South China Morning Post reported. HSBC Holdings Plc launched the eLaisee function on their mobile banking app that allows users to send digital red packets to family and friends. Users can send up to HK$100 and include well wishes. Other popular peer-to-peer payment services are also offering digital lai see, or red envelope, options. Even overseas players are getting in on the action, with U.S.-based PayPal offering digital lai see cards that allow customers in the U.S. to send money to Chinese bank accounts.
India's demonetization drive has revealed a 600 billion Indian rupee mismatch in cash supply that has perplexed some economists and data crunchers, Bloomberg News reported. Indians withdrew about 600 billion rupees more than 9.1 trillion rupees in circulation as of Jan. 13, according to a report from the Reserve Bank of India. This is highly unusual as cash with the public should be lower than the currency in circulation, said Sujan Hajra, chief economist at Anand Rathi Securities Ltd. Between Nov. 9, 2016, and Jan. 13, the central bank printed about 5.53 trillion rupees of new notes and put into circulation 25,197 million bank notes, placing about 9.1 trillion rupees in total currency in circulation.
More Australians are using debit cards rather than credit cards as consumers try to cut back on debt, The Sydney Morning Herald reported. Data from the Reserve Bank of Australia show that debit card transactions overtook personal credit card spending in November 2016. The share of purchases made on debit hit 45% in November, compared with 44.8% on personal credit cards. Households have been increasingly cutting back on big debts on their credit cards since the global financial crisis. Debit cards have also made great strides in technological advancement, allowing customers to shop online or overseas without credit cards. Debit cards are also cheaper as no interest is charged on customers' accounts.
Japanese banks are rushing to make their ATMs accessible to foreign cards by the end of 2018, The Nikkei reported. Nine banks and other ATMs offered around 72,000 machines accessible to foreign-issued cards at the end of 2016. About 90,000 machines are expected to offer this accessibility by the end of 2018. The government has asked the three Japanese megabanks to increase their foreign-friendly ATMs in preparation for the 2020 Olympics.
China Construction Bank Corp. Chairman Wang Hongzhang believes the country needs a panel to coordinate the debt-for-equity swap programs of various Chinese banks, the South China Morning Post reported. Wang pointed out that there is a need to coordinate plans among different banks as the debt structures of these Chinese companies are complicated. His comments underscore the challenges faced by the government's push to cut corporate debt by 120 trillion Chinese yuan. Chinese banks are barred from owning direct stakes in nonfinancial companies, a rule that forces banks to establish their own asset management units to handle these stakes. Banks will also have to find talent to manage the companies in which they have become a shareholder.