Zhang Aihua, a 52-year-old nanny for a family in an upscale residential community in western Beijing, took a walk around the community's ground on a cool late September night after she put the baby she cares for to bed.

Suddenly, in the moonlight, under a cold bench, she noticed something: a stack of cards bundled with a rubber band. She unwound the band to find eight prepaid shopping cards, each with a face value of 1,000 yuan ($159), and receipt for a gold bracelet worth 4,000 yuan.

She thought of trying to find the owner of the cards and asked her employer for help, but was told that it would be difficult to trace their owner because shopping cards with a face value below 1,000 yuan were not covered under the real-name registration system implemented last year.

She was also told that these cards were probably bribes and the money in them must have been used to purchase big ticket items such as the gold bracelet or electronic gadgets.

"She was right. It took me about a week to try these cards at shops to find out all the money on them had been spent," Zhang said.

"My employer also said it's no secret that people buy small value shopping cards to dodge the real-name registration system which requires purchasers to show ID when buying large value cards," she said.

Laying down the rules

Rules about managing prepaid cards were announced by the country's central bank and commerce ministry last month and are set to become effective from today.

On September 21, the Ministry of Commerce (MOFCOM) issued rules requiring prepaid card issuers and sellers to register the name, ID number and contact information of card purchasers if any individual and entity purchasing a card worth over 10,000 yuan.

The rules also state that entities purchasing prepaid cards valued above 5,000 yuan and individuals purchasing cards worth more than 50,000 yuan must pay for the cards via bank transfer.

Cards issued to a single individual must not exceed 5,000 yuan in value, while cards which can be used anonymously must not exceed 1,000 yuan.

The ministry also placed sales restrictions on card merchants. Sales of prepaid cards for card issuers specializing in retailing, lodging and catering must not to exceed 40 percent of their income from their primary business.

Six days later, the People's Bank of China, the country's central bank, also issued similar rules to govern prepaid cards.

The central bank's rules also require card issuers to follow the same name registration rules when users add value to their cards.

Several of these measures had been previously outlined in rules issued by the State Council, China's cabinet, in May 2011, when the country began separating prepaid cards into those which carry the name of their user and have face values exceeding 1,000 yuan, and those valued below 1,000 yuan which can be used anonymously.

At that time, the State Council said the move was aimed at curbing money laundering, tax evasion and bribery.

It did not provide a timetable for when the rules would be implemented, but required functioning entities including the central bank and Ministry of Commerce to launch an inspection by the end of 2011 to regulate the prepaid card market.

Sales of prepaid cards (excluding campus cards, game cards, gas cards and phone cards) reached 1.4 trillion yuan in early 2011, when consumption with prepaid cards hit 1.04 trillion yuan, MOFCOM's data show.

Stepping through loopholes

Despite the rules last year though, many prepaid cards issuers have found ways around them.

A staff member at a branch store of Beijing Hualian Group (BHG), a supermarket chain, in western Beijing said the store offers prepaid cards with face values between 200 and 2,000 yuan and customers need to show ID when purchasing cards with a face value above 1,000 yuan.

But there is no limit on the number of cards valued at 1,000 yuan each that customers can buy, the staff member explained, adding that no matter how many such cards a person decided to buy, they would not have to show identification.

He also said the store offers tailor-made cards which carry no limit on their value.

A Carrefour China store in eastern Beijing also offers similar "special face value" prepaid cards.

An employee at that store said such special value cards are for large amounts and the store will only offer to customers who buy at least 30 of such special value cards. Customers can receive them with one day's notices and the store does not require customers to show their ID nor register their ID number.

 "For customers who purchase prepaid cards with a total value of more than 10,000 yuan, we only ask them to leave their name and telephone number as a way to record the transaction," she said.

When asked whether the store will change its policies to meet the new rules by the central bank and Ministry of Commerce, the staff member said he had not received any notice yet.

Taking a closer look

"Prepaid cards are increasingly becoming tools for people to offer bribes to officials and officials usually feel less guilty accepting prepaid cards compared with accepting cash," Lin Zhe, a professor of anti-corruption research at the Party School of the Central Committee of the Communist Party of China said.

"There has been debate about the real-name registration system for prepaid cards since last May. The question now is not about discussing whether the system is feasible, but how the functioning bodies can get these rules implemented," she said.

One of the earliest cases of prepaid card bribery to make headlines in China occurred in 2009, when Du Hongmiao, deputy chairman of Shengzhou City Committee of the Chinese People's Political Consultative Conference in Zhejiang Province, was convicted of taking bribes which included  more than 180,000 yuan in shopping cards.

Although official data is still lacking on the extent to which prepaid cards are used in instances of bribery and corruption, a report from the People's Procuratorate of Shijingshan District in Beijing shows that shopping card bribes accounted for more than 80 percent of the bribe cases investigated by the procuratorate.

"Selling prepaid cards is a common strategy for businesses to boost their sales and businesses are keen on marketing these cards because they can achieve their sales targets in advance if they sell more of them," said Li Jilin, secretary general of Guangdong Circulation Chamber of Commerce.

"If used rationally, prepaid cards could boost domestic consumption, but now they've become a synonym for bribes," he said.

The key to promoting the real-name registration system for prepaid cards is setting a threshold for businesses qualified to issue them and reinforcing supervision on card issuers who may receive a severe penalty, such as suspension of operation if caught dodging the rules, Li noted.