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Induce cash-out, revealing the "low-rate trap" of POS machine replacement

"The original machine should be eliminated, and you will be replaced with a new one for free", "In order to avoid derating and sealing the card, you need to replace the new card machine", "The rate is as low as 0.23%, and the machine is free of charge"...... Do you ever have the experience of receiving calls from so-called payment companies asking for a new POS machine?

Just recently, a number of consumers reported frequent such calls, the other party said that "affected by Document No. 259" ("People's Bank of China on Strengthening the Management of Payment Acceptance Terminals and Related Business"), the original POS machines were all suspended, requiring the re-issuance of new POS machines, supporting credit card cash, and even WeChat, Huabei, white bar scanning code cash, scanning code rate of 0.23%, card rate of 0.45%.

Free POS machine, very low rate of cash-out model, seemingly tempting publicity, many people or have a "do not try nothing" psychological attempt, but do not know the hidden low rate trap: the so-called free is not simple, in addition to the machine deposit, but also requires the cash flow to reach 1000 yuan to activate, in addition to the 0.23% rate also hidden mystery, requiring users to continue to swipe credit cards to obtain, and even to buy hundreds of yuan of super VIP rights.

Induce cash-out, revealing the "low-rate trap" of POS machine replacement

Image source: Yitu.com

The cat behind the free changeover

Through the "No. 259 document" telemarketing network sales, stepping on the red line

"Give you a free 0.23% credit card machine, do you think you need it?" Recently, consumer Lin Xiang (pseudonym) has received a lot of similar POS calls to sell.

Judging from the multiple sales reports received by Lin Xiang, the other party first contacted through the fixed telephone, and the words were mostly used in the No. 259 document "one machine and one household" as the reason, claiming that the original machine was about to be eliminated, and guiding the user to replace the POS machine for free, and then the so-called delivery department or after-sales customer service contacted to obtain the user's address information.

According to Circular No. 259, one bank card acceptance terminal can only correspond to one acceptance terminal serial number, i.e., "one machine, one code", and one bank card acceptance terminal can only correspond to one special merchant, i.e., "one machine, one household".

"After Circular 259, all machines and tools are 'one machine and one household', and only by replacing the POS machine with a new one will not cause you to block the card, the rate will be lower, and the funds will be safer." Said the staff of the shipping department. According to reports, it is the staff of Kaidianbao Payment Service Co., Ltd. (hereinafter referred to as "Kaidianbao"), and the POS machine is "a new 4G type in 2024, no code hopping, landing on real merchants, and a regular UnionPay clearing machine; It only costs 23 yuan to scan the code for 10,000 yuan, and 45 yuan for 10,000 yuan to swipe the card. In addition, it can also update the merchant pool in real time, randomly match merchants, and support WeChat, Alipay, Huabei, and Jingdong Baitiao scanning codes. It is recommended to use it for a long time, which is helpful for raising the amount of the card."

"As soon as I saw that it was free to receive and the rate was very low, I gave the address." Lin Xiang, who claimed to have never used a POS machine before, didn't think much about it, so he gave the other party's address. Soon, the salesman confirmed the receipt information to Lin Xiang, and sent the POS machine of Kaidianbao a few days later. Judging from the shortcut menu of the machine, including merchant download, key download, communication settings, App download and other functions, scan the QR code on the POS page to enter the official service account of Kaidianbao.

Induce cash-out, revealing the "low-rate trap" of POS machine replacement

Image source: Courtesy of the interviewee

"Nowadays, young people use credit cards more, and with this machine, it will be more convenient for funds to flow." Lin Xiang said that this was the words introduced to him by the salesman. This batch of POS machines is a new machine after the upgrade, and the cash rate is lower than that of the old machine. However, although it is said to be free of charge, it is necessary to pay 18 yuan in advance for the machine deposit, in addition, after registration, you also need to use the machine to swipe the card "multiple strokes" or "single strokes" to activate the machine with a total of 1000 yuan of flow, and only after activation can you refund 18 yuan in the form of WeChat red envelopes.

To activate, you need to use WeChat to scan the QR code on the back of the machine to register and log in, enter the account number, password and select the merchant category, select the small and micro merchant and upload the ID card information, and fill in the industry and prefix name, and the machine will automatically match the corresponding merchant.

What Lin Xiang didn't know was that the POS machine sales he came into contact with had been on the red line of violations. A reporter from Beijing Business Daily noticed that as early as many years ago, the People's Bank of China issued a notice to make it clear that POS machines are special equipment for financial services, and online casual trading may lead to terminals that do not meet technical standards and have been illegally modified into the market, which in turn will cause risks such as information leakage and capital theft. No unit or individual is allowed to buy or sell POS machines, card swipers and other acceptance terminals online.

In this regard, Su Xiaorui, a senior researcher at Suxi Zhiyan, believes that in the name of Document No. 259, it is not compliant to cast a wide net to sell POS sets to individual users, on the one hand, for financial consumers, it may encourage them to "support loans with loans", resulting in a snowball growth of overdrafts, and on the other hand, it is also suspected of improper competition in the payment industry, in addition, the spread of cashing out to the credit card field may cause bad debts and other risks.

The high price behind low rates

Hundreds of yuan in membership fees and communication fees, in order to increase revenue?

Like Lin Xiang, he was sold online by POS electromechanical, as well as Li Ming (pseudonym), a consumer from Hubei. The other party also used the low rate as a temptation to guide Li Ming to replace the new POS machine, but as everyone knows, behind the so-called low rate, he actually has to pay a higher price.

"The rate of 0.23% was good, but after the actual operation, I found that the routines were one after another." Li Ming said angrily that according to the chat records he provided to a reporter from Beijing Business Daily, after the other party guided Li Ming to register and bind, he instructed him to carry out a small amount of credit card cashing operation.

"After she taught me to enter more than 1 yuan to the account, she taught me how to operate the 0.23% rate of swiping the card." According to Li Ming, although he received a store-opening treasure POS machine, the other party recommended him an official account called "Diantu VIP", to achieve a low interest rate of 0.23%, you need to pay attention to the official account, click on the rights and interests system, and log in to bind. On the public account, Li Ming received a cash red envelope of 4.86 yuan on the Home, and was then guided to click on the rights upgrade, but it was the operation of "rights upgrade" that made Li Ming pay 400 yuan.

Induce cash-out, revealing the "low-rate trap" of POS machine replacement

Image source: Courtesy of the interviewee

Judging from the chat records provided by Li Ming, the other party claimed that Li Ming paid 400 yuan for super VIP rights, and 400 yuan can be given for buying 400 yuan, and another 200 yuan for communication fees, a total of 1000 yuan, which can be withdrawn to WeChat change. However, in Li Ming's actual operation, the 1,000 yuan is not actually received, but as a reward for cashback, which needs to be obtained little by little by constantly swiping the credit card.

For example, Li Ming swiped 1980 yuan with a credit card, and only 2.38 yuan could be refunded, and in addition, he was deducted more than 100 yuan in communication fees, and the actual arrival was only 1869.71 yuan. In addition, judging from Li Ming's multiple card swiping records, the multiple swiping rate is not 0.23% as claimed.

Induce cash-out, revealing the "low-rate trap" of POS machine replacement

Image source: Courtesy of the interviewee

"There is a discrepancy between the actual deduction fee of the user's credit card and the claimed 0.23%, which is suspected of inducing and defrauding financial consumers in the financial marketing and publicity process." Su Xiaorui commented.

In addition, a senior lawyer in the payment industry also told a reporter from Beijing Business Daily that the actual deduction fee for users swiping the card is different from the claimed 0.23%, which is suspected of defrauding consumers. At the same time, consumers should also be wary of such low-rate traps, where the salesman who sells POS machines uses low rates to attract users, so that users jump into the "low-rate trap", and then further guide consumers to buy equity products in order to seek improper benefits. On the one hand, this can earn high membership fees, and on the other hand, the system of "receiving cash red envelope rewards by swiping the card every day" can also motivate users to use POS services for a long time, and can seek additional communication fees during the period. In his opinion, the relevance of Diantu VIP and POS machine business can be seen, but this does not meet regulatory requirements, and may even be suspected of illegal business crimes.

Beijing Business Daily reporter noticed that Diantu VIP claims to be a member rights system, the public account is operated by the "Dehua County Dianmai Soil Technical Service Department (individual industrial and commercial households)", from the perspective of membership privileges in the rights and interests system, it claims that you can receive cash red envelope rewards every day by swiping the card, but according to user feedback, it will charge hundreds of yuan of high membership fees, and the so-called rewards are also obtained by motivating users to continue to swipe credit cards, which will also charge hundreds of yuan in communication fees during the card swiping process.

In the opinion of the above-mentioned lawyer, the POS machine does need to pay a certain communication fee during use, which is to ensure the normal progress of the transaction and the stability of data transmission. However, if the cost of communication is too high and the user is not clearly informed, it may be considered unreasonable behavior and suspected of defrauding the consumer. In addition, the practice of incentivizing users to keep swiping credit cards to obtain cash rewards may also be suspected of inducing consumption, and if cardholders fail to repay on time due to excessive spending, their credit history will be directly affected, resulting in restrictions on financial activities such as loans and credit card applications in the future.

Su Xiaorui further said that directing users to Diantu VIP to purchase members indicates that the relevant institutions are trying to achieve "increased revenue" in value-added links other than paying fees, and if such members are tied to the encouragement of cash-out, then it reflects that the institutions play a role in arbitraging behavior.

Repeated prohibition of illegal cash-out

Match merchants, simulate consumption, and hide risks

According to a number of users, the salesman who sells the store treasure POS machine also introduced that the new POS machine can achieve "one machine and one code" corresponding to a merchant, after the user receives the machine, only credit cards and ID cards are needed, which can assist in providing users with merchant information, such as user turnover in 30,000 to 50,000 yuan a month, which can help match supermarket, restaurant merchant information, if it is a larger amount of turnover needs, it can help match building materials merchants.

Induce cash-out, revealing the "low-rate trap" of POS machine replacement

In addition, a reporter from Beijing Business Daily noticed that some salesmen also shared POS machine card swiping tips on social platforms, and also reminded users to try to brush large amounts on holidays and achieve rapid increase by simulating real consumption.

Su Xiaorui bluntly said that as a licensed payment institution, its POS machine has problems in the business process, "matching real fixed merchants", which is a specific manifestation of the relaxation of risk control defense lines by relevant institutions or even the virtual reality.

The above-mentioned senior lawyers in the payment industry also believe that these operations have involved insufficient merchant identification and risk control. In his opinion, many offline acquirers have problems in merchant identification and mobile POS machine deployment, resulting in the inability to effectively monitor and prevent risks. This not only increases the risk of banks and payment institutions, but also makes it easy for criminals to use them for cash.

The current behavior of POS machine sleeves has been strictly cracked down by supervision, but why is it repeatedly banned? In this regard, Wang Pengbo, chief analyst of Broadcom Consulting, also told a reporter from Beijing Business Daily that the main reason is to obtain more profits: "The industry competition is fierce, and the profit point is continuously diluted. ”

It is worth noting that at present, the credit card sleeve is now suspected of violating the law, and the crime of using POS machines to cash out is also clearly sentenced.

As Li Ya, a lawyer at Beijing Zhongwen Law Firm, told a reporter from Beijing Business Daily, at the legal level, cashing out with POS machines is actually an act of defrauding banks and harming national interests. This kind of behavior will be suspected of fictitious loan fraud or credit card fraud, illegal business operation and other crimes.

Arbitrage is also harmful to the cardholder. Li Ya further added that if the bank finds that the consumer has arbitrage behavior, without harming the interests of the bank, it will take measures such as reducing the credit card limit or stopping payment and blocking the card, and if it causes significant financial losses to the bank, the cardholder will also have corresponding legal sanctions.

In fact, as early as many years ago, the person in charge of the relevant department of the People's Bank of China emphasized that the means of some market entities to alter transactions are constantly renovated, resulting in the difficulty of restoring the real consumption scene of transaction information, which not only infringes on the legitimate rights and interests of consumers, causes complaints and disputes, but also brings opportunities for criminals to transfer illegal and criminal funds. There are even some criminals who use the collection barcode to transfer gambling funds to provide payment channels for cross-border gambling activities.

Another person close to the regulator also made it clear to the Beijing Business Daily reporter that "the POS machine must be guaranteed to be a merchant in the network audit, so that there is no business characteristics, and the arbitrage behavior of being randomly brushed by individuals is already a serious violation, and the regulator will further strengthen measures to crack down."

There is no end to the chaos of illegal business development

payment institutions and their agents, who is to blame

For POS machine promotion, merchant access, membership rights, cash-out and other issues, the Beijing Business Daily reporter asked the company for verification and interview, but did not get a response from the latter, however, the relevant person in charge of the company told the reporter that the relevant member rights and interests have nothing to do with the payment company.

Induce cash-out, revealing the "low-rate trap" of POS machine replacement

In fact, in addition to the experiences of Lin Xiang and Li Ming, a reporter from Beijing Business Daily searched on platforms such as black cat complaints and found that similar cases are not uncommon. The salesmen who promote the POS machine, some are the internal employees of the payment company, and some are the personnel of its agents, or through text messages, phone calls, or through Internet platforms, social platforms, etc., to promote the replacement of new POS machines to individual consumers, most of them are free and low rates as gimmicks, but there are many routines in actual operation.

Recently, a reporter from Beijing Business Daily received a number of such POS machine sales calls, saying that to avoid reducing the amount of the card, it needs to be reissued and replaced with a new card machine, which is owned by Yinsheng Pay, claiming to be used for credit card cash, and is also free to replace, with a handling fee as low as 0.23%.

In this regard, Yinsheng Payment responded to a reporter from Beijing Business Daily, "Our company does not have a form of telemarketing. Relevant issues will be verified as soon as possible. Yinsheng Pay has been strictly abiding by laws and regulations, thoroughly implementing the policies and regulations of the People's Bank of China, and adhering to the principle of being responsible to customers, consumers and cooperative institutions. In the future, we will continue to abide by the rules, operate in good faith and compliance, strengthen the management and supervision of acquiring outsourcing service providers, and continue to provide safe and high-quality payment services for the majority of users."

For such problems, Wang Pengbo believes that the relevant payment institutions should pay attention to the illegal business development of its agents to avoid agents not knowing it under their banner, resulting in such chaos one after another. In Wang Pengbo's view, a series of relevant laws and regulations have been promulgated by the regulators, all of which are conducive to tackling such problems at the root. In addition, payment institutions should form a linkage mechanism with banks to strengthen their awareness of risk prevention, such as strictly reviewing the conditions and quotas of applicants, and strengthening merchants' liability for breach of contract. In addition, it is necessary to strengthen the management of outsourcing agents.

On the one hand, payment institutions are obliged to strictly abide by the relevant regulatory and compliance requirements of major banks, including strict compliance access for POS machine cardholders, special merchants and acceptance terminals; On the other hand, it is also necessary to strengthen the management of the security supervision process and improve the security compliance awareness of employees and relevant agents, so as to effectively prevent payment risks and ensure that every transaction is carried out safely and compliantly. In addition, it is also necessary to strengthen the management of POS machine application, parameter setting, use, replacement, maintenance, revocation, etc., and establish a complete management system covering all links.

At the regulatory level, Su Xiaorui suggested that the crackdown on such infringements on financial consumers (merchants) can be further strengthened, and the original intention of "payment for the people" service can be implemented, and payment institutions can be guided to return to their main business.

Beijing Business Daily Financial Investigation Team