Credit card acceptance curtailed
- Source: Global Times
- [08:47 July 16 2010]
- Comments
A bank counter in Shanghai. Banks in the city have received notice from China UnionPay banning credit card transactions at individually-owned POS machines. Photo: IC
By Tang Zhao
Businesses classed as being under the ownership of individuals will no longer be allowed to accept credit card payments, Chinese card transaction provider China UnionPay (CUP) has told banks.
A manager at Shanghai-based Bank of Communications, who asked not to be named, confirmed to the Global Times Thursday that a notice from CUP was sent to all local banks earlier this month saying that point-of-sale (POS) machines owned by individu-als are barred from accepting credit card transactions, unless their settlement accounts are changed from personal ones to corporate ones. However, they will still be allowed to accept debit card payments.
"To define if the owner of a POS machine is an individual user or a corporate user, we will verify their business operation licenses and tax slips," said the manager, adding that although his bank has already banned such transactions, other banks may have different timetables for enforcing the ruling.
The policy is a national one. Lin Yansong, general manager at the marketing department of CUP Guangdong branch, said that the aim is to crack down on unauthorized transactions and prevent credit card-related crimes, the Guangzhou-based New Express Daily reported on July 9.
The newspaper said that People's Bank of China, China Banking Regulatory Commission, Ministry of Public Security and State Administration for Industry and Commerce is-sued a joint notice to reinforce the management of bank cards, and scrutinize applications for POS machines.
However, some local residents say that the planned cessation of such transactions may cause them some inconvenience.
"If most small stores do not accept my credit card any more, I will have to bring more cash with me, which is troublesome as well as risky," Zeng Jing, a local office worker and frequent visitor to small boutiques, told the Global Times Thursday.
The revenue of CUP, the only payment network in China, reached 3 billion yuan ($443 million) in 2009, Chinese Web portal 163.com reported on Tuesday. The report said that CUP's asset size increased from 1.7 billion yuan ($251 million) when it was established in March 2002 to 9.2 billion yuan ($1.36 million) in 2009, and that its profit has grown more than 100 percent annually over the last three years.
