China is pushing for Visa Inc. and Mastercard Inc. to lower
their bank card transaction fees in the country, according to a source familiar
with the matter. This move is part of an effort to facilitate payments for
foreign visitors.
China Proposes Fee Cut
The Payment & Clearing Association of China is in talks
with global card issuers, including Visa and Mastercard, about reducing fees
that local merchants pay for foreign card transactions. The association has
suggested reducing the fee to 1.5% from the current 2-3%, the source said. The
source requested anonymity due to the private nature of the discussions. These
negotiations are still ongoing, and the specifics of the fee reduction may
change.
Mastercard has acknowledged receipt of the proposal from the
industry association and affirmed its commitment to collaborating with payment
industry partners to lower costs for local merchants accepting foreign bank
cards. However, neither the industry association nor Visa has responded to
requests for comment.
China has asked Visa $V and Mastercard $MA to lower bank card transaction fees from 2-3% to 1.5%, aiming to facilitate payments for foreign visitors. The Payment & Clearing Association of China is negotiating with the global card issuers to implement the fee reduction.… pic.twitter.com/0tqnWfsTHn
— Wall St Engine (@wallstengine) June 21, 2024
Urging More Acceptance of Foreign Cards
Earlier, the industry group issued a proposal to
global card issuers aimed at reducing fees, as indicated in a statement
published on its website on Tuesday. The statement did not specify the exact
reduction in fees. Issuers were encouraged to coordinate with their network
members to introduce favorable fee structures, with the goal of encouraging
local merchants to accept foreign bank cards.
China’s retail sector is becoming increasingly digitized and
cashless, but many merchants are hesitant to accept foreign bank cards due to
high processing fees. China aims to lower these fees to make payments more
convenient for foreign visitors. In March, the State Council encouraged local
authorities to push more merchants to accept foreign cards.
This article was written by Tareq Sikder at www.financemagnates.com.
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