Speech at Panel on Economic Development

Statutory cooling-off period for beauty and fitness services consumer contracts

Conditions of service imposed on beauty service traders by banks

Mr CHAN Chun-ying said that the Administration should focus on protecting consumers’ interests without affecting the operation of the beauty service trade, and that issues relating to non-cash payments were one of the important matters to discuss in order to implement the proposal. He informed the meeting that he had met with some beauty service traders and explained to them that banks’ handling of non-cash payments varied greatly, and that traders were free to choose the banks that could best cater for their needs. He clarified that acquirers in Hong Kong included not only the 11 banks but also some other merchant acquirers. At his meeting with HKMA and representatives from the 11 banks and certain merchant acquirers on 22 February 2019, it was confirmed that no changes had been made to the conditions as regards the acquiring service provided to the beauty service traders after the announcement of the proposal. Any change to the conditions for a few individual traders had to do with these individual traders’ credit conditions. The aforementioned representatives also agreed that a cooling-off period would have positive impact on the assessment of traders’ credit conditions.

Mr CHAN Chun-ying suggested that if a statutory cooling-off period of three or seven days for beauty and fitness services consumer contracts was introduced, traders could consider deferring the execution of credit card transactions until the lapse of the cooling-off period, so that in case customers wanted to cancel their contracts within the cooling-off period, no extra fee would be imposed by banks/merchant acquirers. He said that he put forward his suggestion at the aforementioned meeting on 22 February 2019, and that all representatives present agreed that such an arrangement would not result in a further delay of payment to traders. As certain payment service providers, like Visa and Mastercard, did not allow deferring the execution of transactions, bank representatives undertook at the meeting that they would discuss with these companies to seek their consent in allowing traders to do so. He believed that merchant acquirers might be pressurized into allowing traders to defer the execution of the credit card transactions if such an arrangement had become a practice generally accepted by banks and payment service companies.