- The banking giant has reportedly struggled to grow its credit card venture due to competition and regulatory hurdles.
- HSBC may retain services for affluent customers, focusing on luxury and international travel.
HSBC’s attempt to establish itself in China’s competitive credit card market could end. After eight years of effort, the global banking giant has decided to scale back its operations, according to a report by Reuters.
HSBC launched its credit card business in China in late 2016 as part of a broader strategy to deepen its presence in Asia. However, despite reaching around one million users by 2019, the bank struggled to grow the venture into a profitable enterprise.
According to sources familiar with the matter, HSBC has already stopped issuing new credit cards and is working to wind down services for most of its onshore clients.
A significant portion of the bank’s credit card customers in China reportedly consist of stand-alone users, those who do not use other HSBC banking services. Once their cards expire, these clients will no longer have their cards renewed.
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A Failed Sale
While the bank has yet to finalize its plans, it may retain credit card services for a small segment of affluent customers, focusing on international travel and luxury features.
HSBC’s decision to exit the Chinese credit card market follows unsuccessful attempts to sell the business. The bank’s retreat underscores the challenges of navigating China’s tightly regulated financial sector and the intense competition from domestic banks and digital payment giants.
The move marks a shift in HSBC’s earlier commitment to expand retail banking and wealth management services in China as part of its broader Asia-focused strategy. While HSBC continues to generate a significant share of its revenue from Asia, its inability to secure a foothold in the Chinese credit card market represents a notable setback.
HSBC’s decision highlights the complexities foreign banks face in penetrating China’s financial market. Local competitors, including state-owned banks and digital platforms like Alipay and WeChat Pay, dominate consumer lending and payment services. For HSBC, the move reflects a recalibration of its strategy in China.
