Guide to opening virtual bank account: requirements, fees and business account services

Virtual banks have become increasingly popular in Hong Kong in recent years. What are the benefits of virtual banks? What virtual bank options are available in Hong Kong? This article will answer your questions, including services offered by virtual banks and the requirements and fees for opening an account.

What are virtual banks?

A virtual bank is a bank that provides banking services through digital channels. It doesn’t have a physical branch as all services can be completed online. Customers can open an account, make deposits and apply for loans through the bank’s mobile application or website.

The Hong Kong Monetary Authority requires virtual banks to primarily engage in retail business and prohibits virtual banks from establishing minimum account balance requirements. Although virtual banks don’t have a physical branch, they must have a physical office in Hong Kong for handling customer inquiries and complaints.

List of virtual banks in Hong Kong

There are 8 virtual banks in Hong Kong currently:

Comparing account opening requirements of different virtual banks

Differences between virtual banks and traditional banks

1. Account opening methods and charges

The account opening process for virtual banks is relatively simple and fast compared to traditional banks. It can be completed within 5 to 10 minutes via the virtual bank’s mobile application. Corporate account applicants only have to provide their personal and corporate information, take a photo of identification documents and verify through SMS. The bank will then conduct a company search.

Besides, opening a virtual bank account is generally cheaper than opening a traditional bank account. Most virtual banks don’t impose minimum deposit requirements or monthly service charges.

2. Service hours and access

Traditional banks have fixed operating hours while virtual banks are not limited by space or time. As virtual banks don’t have physical branches, customers do not have to queue at the bank. They can conveniently access bank services through the banks’ mobile applications or websites anytime, anywhere.

3. Risks and security

Although virtual banks don’t have physical branches, they are required by local authorities to have a physical office. They are also regulated by the Hong Kong Monetary Authority, the same as traditional banks, and participate in the Deposit Protection Scheme, which offers a total deposit protection amount per depositor of HK$500,000.

4. Types of services and products

Currently, traditional banks offer a wide range of online services, including foreign currency exchange, time deposits, loans and mortgages. Services provided by virtual banks are not as varied as traditional banks as they are still in the early stages of development. They mainly provide time deposits, demand deposits, remittance services, etc. Some also provide loans.

Products and services offered by virtual banks in Hong Kong

Virtual bank accounts for corporates

Currently, there are 8 virtual banks in Hong Kong. Six of them offer corporate accounts (ZA Bank, livi bank, Airstar Bank, Fusion Bank, PAO Bank and Ant Bank). Most virtual banks provide basic services such as time deposits and local transfers. However, not all of them provide cross-border remittances. This may make them unsuitable for businesses operating in different countries and regions.

Limitations of overseas remittances via virtual banks

Although some virtual banks provide cross-border remittance services, most of them conduct the remittance through telegraphic transfer, which is relatively inconvenient compared to other methods.

First, as virtual banks don’t have physical branches, if there are any issues with the telegraphic transfer, customers can only inquire about it via the banks’ official website or mobile applications. Besides, virtual banks also charge handling fees for each remittance. These expenses can gradually eat into your profits.

Furthermore, virtual banks offer limited currency options for telegraphic transfer. They mostly provide HKD, RMB and HKD, which unfavor businesses aspiring to expand to different countries and regions.

Airwallex vs. virtual bank corporate accounts

Aside from virtual banks, financial and remittance platforms on the market, such as Airwallex, can also provide financial solutions for e-commerce and various types of small and medium-sized enterprises. With Airwallex, you can remit funds to over 150 countries and regions within 24 hours, with local payment channels available for remittances to 120 countries and regions, eliminating costs incurred from cross-border telegraphic transfers. 85% of remittances can even be credited on the same day. Open an Airwallex Business Account online for free today.

*The above information was sourced from the official websites of virtual banks in June 2024. For the latest information, please refer to the announcements from each bank.

Frequently asked questions

1. Do virtual banks have deposit protection?

All licensed banks in Hong Kong, including virtual banks, must participate in the Deposit Protection Scheme, which offers a total deposit protection amount per depositor of HK$500,000.

2. How can customers of virtual banks withdraw and deposit funds?

Some virtual banks provide physical bank cards, such as ZA Bank, which offers physical withdrawals at ATMs accepting Visa. MOX also allows cash withdrawals at ATMs within the applicable Jetco network.

Meanwhile, customers of virtual banks without physical bank cards will have to transfer funds to their traditional bank accounts with ATMs in order to withdraw cash. It is important to note that not all virtual banks support FPS transfers.

3. Do virtual banks offer account opening promotions?

Many virtual banks offer account opening promotions, such as cash allowance and attractive interest rates for time deposits and demand deposits, to attract customers.

4. How to cancel a virtual bank account?

Most virtual banks don’t specify the account cancellation method on their websites. Customers can directly contact customer service representatives for inquiries.