GGRAsia – No official UnionPay ban for Macau pawnshops: regulator

No official UnionPay ban for Macau pawnshops: regulator

Jun 06, 2018 Newsdesk Latest News, Macau, Top of the deck

The Monetary Authority of Macao said on Wednesday it has not barred the city’s banks from installing China UnionPay Ltd terminals in any “particular industries”.

The announcement was made after several investment analysts covering the gaming sector saying on Tuesday that UnionPay machines had been removed from certain outlets in Cotai casinos.

Rumours had been circulating that late last week, two banks – Industrial and Commercial Bank of China (Macau) Ltd and Bank of China Ltd Macau Branch – had ordered the removal of UnionPay point-of-sale (POS) devices from what analysts termed either “pawnshops” or “jewellery shops” located in Cotai casinos.

At least one brokerage – JP Morgan Securities (Asia) Ltd – has said the issue was also affecting pawnshops and jewellery shops inside casinos on Macau peninsula.

Staff at some of the Cotai outlets were vague on the details, according to the brokerages, but indicated to researchers they had been told that machines had been removed for “upgrade”. Those quizzed had no clear information on when or if such machines would be replaced.

In its Wednesday release, the Monetary Authority of Macao did not directly mention the removal of point-of-sale devices in Cotai. It said it “does not forbid banks from establishing business relationships with merchants of particular industries, but requires banks to equip themselves with appropriate and adequate risk management measures.”

The city’s financial regulator added: “Banks are obliged to perform adequate due diligence on, and ongoing monitoring of, the merchants in order to prevent the abuse of POS machines [for] illegal activities.”

Pawnshops are said by investment analysts to be a route whereby funds from mainland China can be moved cross-border – evading the normal currency export rules from the mainland – by the purchase, typically via UnionPay bank cards, of high-value goods such as watches or jewellery, and then their return for a cash refund.

The monetary authority stated in its Wednesday release “when irregular or abnormal transactions are identified, banks should adopt appropriate actions according to respective risk management measures, including terminating the business relationship with merchants, to prevent involvement in any illegal acts.”

The regulator added that only banks, the Postal Savings Office, moneychangers and remittance companies were currently allowed to provide money exchange and remittance services in Macau.

On Wednesday, Lui Che Woo, chairman of Macau casino operator Galaxy Entertainment Group Ltd, which runs the Galaxy Macau casino resort on Cotai, was asked about the UnionPay issue on the sidelines of the annual meeting in Hong Kong for his family’s legacy business, building materials conglomerate K. Wah International Holdings Ltd.

Mr Lui was indirectly quoted by Chinese-language news outlet Sing Tao as saying that it might be connected with the Chinese government not wanting unchecked growth in the Macau industry. He added that his company would respect any policy or decision made by the Chinese government.