Hong Kong businesses can hold money and make payments through three broad types of provider: licensed banks, virtual banks (licensed banks that operate mainly online), and non-bank payment providers such as stored value facility licensees and money service operators. They are regulated differently, offer different protections and suit different needs.
Eligible deposits with licensed banks and virtual banks are protected by the Deposit Protection Scheme up to HK$800,000 per depositor per bank. Balances with payment providers are not bank deposits. Many businesses combine a bank account with a payment account.
At a glance
- Banks and virtual banks
- Authorised by the HKMA; deposits protected up to HK$800,000
- Stored value facilities
- Licensed by the HKMA; not bank deposits
- Money service operators
- Licensed by the Customs and Excise Department
- Approval
- At each provider's discretion; never guaranteed
Comparing the options
| Point | Traditional bank | Virtual bank | Payment or money service provider |
|---|---|---|---|
| Regulator | HKMA | HKMA | HKMA (stored value facilities) or C&ED (money service operators) |
| Deposit protection | Yes, up to HK$800,000 | Yes, up to HK$800,000 | No; not a bank deposit |
| Onboarding | Often longer; may require meetings | Mainly digital | Mainly digital; often quicker |
| Services | Full range: trade finance, loans, cash, cheques | Narrower, growing | Payments, collections, multi-currency, cards |
| Suits | Established and trading businesses | SMEs with straightforward needs | Online and cross-border businesses |
Questions to ask any provider
- Who regulates you, and under which licence?
- Are my funds protected, and how are they held?
- Which currencies and countries can I send to and receive from?
- What are the fees: account, transfer, foreign exchange margin?
- What documents and information will you need, and how long will onboarding take?
- Can I get statements and data exports suitable for my accountants and auditor?
Practical points
- Your accounting records must cover all accounts, including payment accounts; auditors will request confirmations.
- Keep enough funds in a protected bank account for payroll, tax and rent.
- Expect every provider to carry out due diligence on your owners and business.
- No provider can guarantee approval of an application.
Questions we are often asked
Can a new company open an account with a virtual bank?
Many virtual banks accept newly incorporated Hong Kong companies, but each sets its own eligibility criteria, for example on the location of directors and shareholders and the type of business. Approval is at the bank's discretion.
Is money held with a payment provider safe?
Licensed stored value facilities must safeguard customer funds under HKMA rules, but balances are not bank deposits and are not covered by the Deposit Protection Scheme. Choose licensed providers and keep critical funds in a bank account.
Will my auditor accept statements from a payment provider?
Yes, provided they are complete and the provider can confirm balances. Ask your provider how it handles audit confirmations before you rely on it as a main account.
Self-check: where do you stand?
| Question | If the answer is no |
|---|---|
| Do you know which regulator covers each of your accounts? | Check the public registers |
| Are critical funds held in protected bank accounts? | Review where balances sit |
| Do your accounts provide statements your auditor can use? | Confirm export formats |
| Have you compared foreign exchange costs? | Compare margins as well as fees |
- Preparing account applications for banks and payment providers.
- Integrating all accounts into your bookkeeping.
- Bank and payment confirmations for your audit.
In summary
- Banks and virtual banks: HKMA-authorised, deposits protected up to HK$800,000.
- Payment providers: useful, but not deposits.
- Combine them to suit your business.
Official references
- Hong Kong Monetary Authority: registers of authorised institutions and stored value facility licensees, www.hkma.gov.hk
- Hong Kong Deposit Protection Board, www.dps.org.hk
- Customs and Excise Department: money service operators register, www.customs.gov.hk