China UnionPay Co Ltd – which operates an interbank transaction settlement system for cash payments – has issued a memo ordering a clampdown on illegally modified point of sale (POS) units, report media outlets in Hong Kong and the mainland.
The crackdown is said to have been ordered by China’s financial regulators and the Ministry of Public Security. It will involve the registering and auditing of such devices, and penalties for any failure to comply with the new rules.
There have been reports of POS devices registered for use only on the mainland being rigged to conduct transactions in Macau. Such business is recorded in the mainland’s UnionPay network as domestic, thus avoiding higher fees applicable for cross-border payments.
In 2014 the value of detected transactions using unregistered China UnionPay terminals in Macau amounted to MOP784 million (US$98.2 million at current exchange rates), Portuguese news agency Lusa reported in March, citing Macau police sources.
Brokerage Sanford C. Bernstein said in a note on Thursday: “The new policy of registering and auditing POS devices may be an incremental headwind to Macau GGR [gross gaming revenue], in particular VIP and high end of premium mass.”
The note from the institution’s analysts Vitaly Umansky, Simon Zhang and Bo Wen stated: “In August 2015, Macau police arrested 17 people using mainland POS devices to help gamblers cash out. The individuals were accused of illegally modifying 11 UnionPay POS devices to process unauthorised dealings that appear as mainland transactions.”
The brokerage noted the ‘customers’ were charged only RMB26 (US$4) per transaction, instead of paying the 1.4 percent of the transaction value Macau’s official UnionPay trading platform would have charged.
Sanford Bernstein added: “At this stage, purchase transactions (i.e., pawnshops) via UnionPay are not impacted. In Macau, pawnshops are often used to bypass UnionPay cash withdrawal limits. The pawnshop transactions are legal in Macau and occur through approximately 200 shops. However, there is risk that Chinese authorities may pressure Macau into creating tighter regulations around pawnshops.”
In September, mainland Chinese media reported that China’s State Administration for Foreign Exchange – also known as SAFE – announced new annual limits on automated teller machine (ATM) cash withdrawals made outside mainland China using UnionPay-enabled bank cards.
According to the reports, with effect from January 1, 2016, each UnionPay-enabled card will have a new, annual, cash withdrawal limit at overseas ATMs of RMB100,000 (US$15,714). Prior to that, with effect from October 1, 2015 until December 31, 2015 there is a RMB50,000-per-card ATM cash withdrawal limit, it was additionally reported.
Sep 29, 2021A so-called domestic-tourism bubble that would have permitted Malaysian casino complex Resorts World Genting (RWG) to reopen on Friday (October 1), has been suspended indefinitely, reported The...
"The initial expectation for the October Golden Week was that the Cotai casino resorts might see an average occupancy rate at 80 percent to 90 percent. But that rate now might stand at just 50 percent to 60 percent... following Macau’s news of the new Covid-19 infection cases”
Andy Wu Keng Kuong
President of the Macau Travel Industry Council