CFIC Introduction
◆Visa and Mastercard, together with domestic acquirers, have reduced the handling fees for merchants to accept foreign cards, and the relevant fee reduction measures have been basically implemented on June 15.
Original title: Is the handling fee for overseas bank cards too high? Good news, it's down!
Good news! Regarding the handling fee of overseas bank cards, a reporter from the China Securities Journal recently learned that in order to reduce the acceptance cost of overseas bank card merchants and effectively improve the acceptance environment of foreign cards, Visa and Mastercard will work with domestic acquirers to reduce the handling fees of foreign cards accepted by merchants, and the relevant fee reduction measures have been basically implemented on June 15.
The international card community responded positively
In order to further meet the payment facilitation needs of foreign personnel in China and optimize the payment service environment, the Payment and Clearing Association of China recently formulated and issued the "Initiative on Transmitting All International Card Association Rate Concessions to Merchants and Effectively Reducing the Cost of Foreign Card Acceptance" according to the situation of international card associations to reduce foreign card handling fees and their specific plans, so as to guide all payment service entities to do a good job in fee reduction, protect the legitimate rights and interests of merchants, and further improve the convenience of payment for foreign personnel in China.
According to the Payment and Clearing Association of China, up to now, the preferential work of card handling fees of international card associations has been steadily advanced. On June 15, Visa and Mastercard completed the transformation of the fee reduction work system in Chinese mainland, and actively cooperated with acquiring banks and acquirers to carry out system transformation.
Visa said it will work with acquirers to help merchants quickly start acquiring foreign card acquiring business by reducing card transaction fees, taking incentives to open up more merchants to accept foreign cards, and introducing new acceptance tools. For example, foreign visitors to China can swipe and tap their cards at merchants that support foreign card acquiring and have the Visa logo, as well as withdraw cash at ATMs that support Visa. Foreign visitors to China can scan QR codes to pay at more merchants by binding a Visa card to WeChat Pay, Alipay and other e-wallets. At the same time, Visa also supports cardholders to use foreign cards to pay in mobile apps such as Ctrip, Meituan, and 12306.
Visa said that in the next step, it will continue to increase resource investment and work with partners to promote three major measures to further improve the domestic acquiring environment: first, cooperate with acquirers to optimize the current POS machine acquiring business process and improve the payment experience of cashiers and consumers; The second is to actively respond to the cost adjustment policy and cooperate with acquirers to reduce the acceptance cost of small and medium-sized commercial outdoor cards.
Another international card association, Mastercard, also said that in recent years, Mastercard has continued to deepen the convenience of inbound payment, fully demonstrate China's diversified payment options to potential inbound tourists, and discuss and optimize the cooperation system with payment industry partners to effectively reduce the cost of card acquiring for commercial cards.
According to the data, as of May 2024, the number of offline inbound purchases of Mastercard in China has more than doubled year-on-year.
For the next step, Wiskind said that it will expand the construction of the system, actively assist local governments, and attract overseas people to travel and spend in China; Expand the acceptance network, open up payment channels, and improve the convenience of payment. For example, it is planned to expand the scope of wild card acceptance, delineate key business districts, and create demonstration scenarios, especially in major foreign-related venues such as hotels, public transportation, and scenic spots in hub cities and popular tourist destinations, and plan to add millions of new Mastercard foreign card merchants within three years; Cooperate with more than 50 acquiring bank partners to collect statistics on the acceptance of foreign cards in existing ATMs, strengthen the standardized posting of ATM foreign card acceptance signs in key business districts and the maintenance and update of machinery and facilities, so as to facilitate the clear identification, smooth cash withdrawal, and free consumption of overseas visitors to China.
Acquirers basically completed the fee reduction work by the end of June
According to relevant sources in the payment industry, domestic acquirers have lowered the handling fees of offline card transactions of merchants except for some specific industries according to the fee reduction notice issued by Visa and Mastercard, and the acquirer has basically completed the fee reduction work at the end of June, including the transformation of the merchant rate system, merchant notification, agreement replacement, etc., and will make good use of this fee policy dividend in the future, further strengthen the construction of foreign card acquiring scenarios, and effectively serve the payment convenience of overseas people in China.
ICBC said that on June 15, after the implementation of the fee reduction policy by the two international card organizations of Visa and Mastercard, ICBC actively followed up and adjusted the acquiring fee rate of the corresponding merchants, and transferred the card network profit to the merchants, so as to continue to reduce the acceptance cost of merchants, benefit more merchants, better improve the foreign card acceptance environment, and improve the convenience of payment for overseas visitors to China.
Up to now, ICBC has accepted 200,000 foreign card POS merchants, fully covering key scenarios such as "food, housing, transportation, travel and shopping" for foreign visitors to China. In the early stage, ICBC took the foreign card acquiring business as the entry point, and focused on innovating and launching foreign card acquiring product packages such as foreign card binding, cross-border e-commerce foreign card acquiring, and outsourcing for internal use, aiming at the payment habits of inbound people, solving the pain points of payment services, and striving to improve the multi-level and diversified payment service system.
On June 15, the Bank of Communications also implemented the price adjustment of the acceptance fee of outdoor cards of designated industry merchants, transferred all the preferential rates lowered by the international card associations to the merchants, and effectively communicated with the merchants, so that the price adjustment work was smooth and smooth.
At present, Bank of Communications has fully accepted online and offline consumption transactions of overseas bank cards of five major foreign card organizations, including Visa and MasterCard. All Bank of Communications outlets nationwide have cash self-service machines with foreign card cash withdrawal functions, and all provincial branches can accept applications from local merchants to open foreign card acquiring business. According to the data, as of the end of May, Bank of Communications had achieved full coverage of key merchants in 17 key cities, with a net increase of 221% in the number of merchants accepting wild cards compared with the end of February, and a year-on-year increase of 132% in transaction volume in the past three months.
In addition, ABC said that in order to better provide an efficient and convenient payment experience for overseas visitors to China, ABC has released graphic tutorials such as introduction to wild card knowledge and acceptance operation guidelines through online channels, and carried out remote teaching for merchants, with more than 300,000 online tweets read. Combined with regional characteristics, we will deploy promotional materials such as leaflets and posters for wild card acceptance guides, and carry out cashier training on site, covering all key merchants. ABC has also created a unique series of acceptance signs called "Only This Green", which are posted in conspicuous positions such as merchants' cash registers, sliding doors, reservation boards, and bill folders, so that overseas visitors to China can experience convenient payment and feel the charm of traditional Chinese culture.
Source of this article: China Securities Journal
Author: Peng Yang
WeChat editor: Liu Sile
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