HSBC launches virtual debit cards for UAE businesses

Unique numbers are generated for each transaction so account numbers can be shielded

Customers use ATM cashpoints outside a HSBC bank branch in London on June 9, 2015. Scandal-hit bank HSBC said it would cut its global headcount by up to 50,000 as part of a restructuring that entails its withdrawal from Brazil and Turkey, while it also mulls abandoning London as its HQ.   AFP PHOTO / JUSTIN TALLIS (Photo by JUSTIN TALLIS / AFP)

HSBC is launching virtual debit cards for businesses in the UAE.

The cards will be distributed electronically, which is a quicker and more secure method than delivering physical cards, and sit on a user's mobile device, the London-based lender said in a statement.

The cards operate on Visa’s Payable Automation platform, which works by generating a unique card number for each transaction so the user's account number is shielded, providing greater protection for the business from fraudulent activity, the bank said. Payments are then debited directly from the corporate cardholder’s current account.

“The pace of digital adoption by businesses in the UAE has accelerated over the past 12 months, with an increased demand for more flexible payment channels,” Kailash Nair, HSBC's regional head of commercial cards for the Middle East, North Africa and Turkey.

“HSBC is investing to create a bank fit for the future and that means availing [of] multiple digital options to suit the different needs of our corporate client base.”

The Covid-19 pandemic has triggered a boom in digital and contactless payments, fast-tracking the Middle East’s journey to reduce its reliance on cash. The region’s $200 billion digital payments industry is booming as local lenders move more services online to cater to a young, tech-savvy customer base.

HSBC already offers virtual credit cards, and the addition of virtual debit cards could help companies to better manage cash flow forecasting, the lender said.

“With the rapid adoption of digital B2B payments, we are seeing a great demand for innovations that help businesses increase back-office efficiencies, better manage cash flow and pay suppliers easily and securely,” Visa's UAE general manager Shahebaz Khan said.

“With the increase in remote working, businesses are looking for seamless, digital solutions to deliver directly to their employees’ mobile devices for immediate use.”

Digital is key to businesses succeeding as the world recovers from the Covid-19 pandemic, with “high growth” companies (those that expect more than 5 per cent sales growth this year) now making most sales online, according to an HSBC survey last year that polled more than 10,000 companies globally.

Thirty-two per cent of “high growth” firms expect technology-driven efficiencies to be a key driver for their recovery and 87 per cent plan to invest in digital tools this year, the survey found.