The People’s Bank of China has ordered the country’s banks to stop issuing credit cards that allow customers to transact purchases in dual currencies, in the latest move to plug regulatory gaps and stem capital flight while the renminbi continues to sink to an eight-year low.FT: Bank card groups to lose China market share
Credit cards issued in China with Visa or Mastercard must be replaced with those issued by the country’s dominant currency clearing company China UnionPay Co when they expire, according to a November 23 report in the Communist Party’s mouthpiece People’s Daily newspaper, citing a recent undated meeting called by the central bank with Chinese lenders.
The world’s largest bank card companies are set to lose a share of China’s $8tn payment card market as they scramble to build their own clearing businesses.iFeng: 央妈对你手上这类银行卡宣判死刑！立即执行！
China’s banks have halted all orders for co-branded credit cards bearing the logos of foreign card issuers such as Visa and MasterCard, according to Goldpac Group, a Hong Kong-listed company that manufactures about 30 per cent of credit cards for the Chinese market.
The move followed a notice from the People’s Bank of China that told banks not to renew the cards, Goldpac confirmed.
The co-branded cards, which sport foreign company logos alongside that of state payment clearing monopoly Unionpay, have been a trademark of China’s tight control over its capital account and payments made in renminbi. While the cards allowed foreign groups to process US-dollar denominated payments for Chinese customers travelling overseas, Unionpay has kept a firm hold on domestic currency clearing for card payments.
The meeting officially announced that the more than 10 years of double standard CUP cards are removed, for the future bank card clearing paved the way for the competition, reflecting the central bank pay system leadership visionary strategic thinking, the Sino-US relations under the framework of this plan to open up the bank card clearing market paving the way for Sino-US trade negotiations.
...At present, there are two kinds of chip card standard in the Chinese market, one is the international common EMV standard, one is the People's Bank of China PBOC standard. EMV standard is the international IC card organization - Europay (European card, has been MasterCard acquisition), MasterCard and Visa co-sponsored the development of financial IC card payment technical standards, has become a recognized global standard. EMVCo is a nonprofit organization that manages the EMV standard. There are currently six members, namely Visa, MasterCard, American Express, DISCOVER, Japan's JCB and China UnionPay (just joined in May 2013).
PBOC financial IC card leading group office director Li Xiaofeng said, PBOC from 2.0 to 3.0, to achieve the digestion of EMV to introduce a leap in independent innovation. To high-speed rail, technology, safety standards are not bad, "big country to have their own cards and standards." "From an international point of view, the highest level of market competition is the standard dispute." Li Xiaofeng said.
The current PBOC standard only UnionPay, and China UnionPay as a local card organization, in the regulatory support, VISA and MasterCard as a leader in international card standards, the standard of China's card has been disagree. "" From April 1, 2015 onwards, the issuing bank's new financial IC card should be consistent with PBOC3.0 specification "
"The new card requirements are PBOC3.0, should refer to the local currency bank card. Card organization of foreign currency credit card can still support its standard bank card issuance, but can not issue the currency card." In other words, the wild card organization once issued RMB Single-currency card, it must comply with PBOC standards.
"This is a major measure to protect China's financial security, optimistic view, first of all to help China UnionPay international, with China's spending power is strong, will inevitably supervise the acquisition of foreign institutions to accept the corresponding transformation of the environment, wild card organization for a large number Of China 's cardholders, but also to help foreign acquisition of institutional transformation, which is China' s bank card has become a major step in international standards, is the national level strategy.