(Yicai Global) Aug. 12 -- LiviBank, Hong Kong’s fourth digital-only bank, started offering its virtual services to customers today, which include the special administrative region’s first virtual debit card linked with China’s biggest bank card provider UnionPay, the Securities Times reported.

The firm has teamed up with UnionPay International, the Hong Kong subsidiary of the Chinese payments giant, to offer the region’s first UnionPay card to be issued by a virtual bank. Customers can also make electronic payments by scanning the UnionPay QR code at stores that have joined the network.

So far, UnionPay is linked with 40,000 retail stores in the special administrative region and has issued over 30 million cards in Hong Kong, UnionPay International said

Backed by the Bank of China’s Hong Kong division, internet consumer finance firm Jingdong Digits Technology Holding and multinational conglomerate Jardine Matheson Group, LiviBank is also offering cash rewards of HKD100 (USD12.90) to anyone who open a new account with it, and another HKD100 for any referrals.

Virtual banks, which are lenders that operate primarily through online platforms rather than in physical branches, have not performed as well as expected in Hong Kong. Of the eight licenses issued so far, only four have now opened for business. These include Chinese online insurance firm ZhongAn’s ZA Bank and Chinese electronics giant Xiaomi’s Airstar Bank and Alibaba Group Holding-backed WeLab Group’s WeLab Bank as well as LiviBank.

Limited market space in the virtual banking sector is one key reason for the slow progress, said Chen Wen, director at Chengdu’s Southwestern University of Finance and Economics' Digital Economy Research Center.

It is likely that the virtual banks in Hong Kong will try to take advantage of the opening up of the financial sector in the Guangdong-Hong Kong-Macao Greater Bay Area later, industrial insiders say.

The Greater Bay Area Wealth Management Connect scheme was given the green light by regulators at the end of June to start a pilot trial, paving the way for the financial integration of Guangdong province and the special administrative regions of Hong Kong and Macao.

Editor: Kim Taylor