International bank card clearing institutions such as Visa and Mastercard have reduced transaction fees on overseas bank cards for Chinese merchants. This move is expected to encourage more local merchants to accept these card payments, aligning with China's efforts to build a fully accessible, diversified, and globally compatible payment ecosystem.
As the finance and banking sector embraces technological advancements, high fees for overseas bank card transactions have remained a significant obstacle for merchants. The recent fee reduction aims to optimize the environment for such payments in China.
When consumers use a bank card, merchants pay a transaction fee. In China, shops typically pay around 0.6 percent of the transaction amount for domestic bank cards, while the fee for overseas bank cards was previously between 2.5 to 3 percent. This has now been reduced to 1.5 percent.
In the evolving world of finance and technology, bank card payments remain globally popular. China is working to bridge differences in domestic and international payment practices to provide better overseas bank card services. In early March, China released guidelines aimed at optimizing bank card payment services, promoting cash use, and facilitating mobile payments to better fulfill the diverse payment preferences of foreigners and senior citizens.
Following the rollout of these guidelines, Chinese authorities have taken decisive steps to facilitate bank card payments. A circular jointly issued by the National Development and Reform Commission and four other government bodies in late June emphasized promoting the acceptance of overseas bank cards in various venues and stores. This will enable easier access to dining, accommodation, transportation, ticket purchases, and reservations for international visitors.
The fees associated with overseas bank card payments are often shared by international card organizations, receiving parties, card issuers, and other participants. Therefore, reducing these costs requires coordinated efforts from all involved parties. By the end of June, relevant Chinese institutions had largely completed fee adjustments, reducing offline card transaction fees for merchants across the board, except for some specific industries.
According to the Agricultural Bank of China, one of the country's largest commercial lenders, the adjusted transaction fees have benefited over 45,000 merchants. The bank reported a 157 percent year-on-year increase in the value of overseas card transactions by their clients, with the number of transactions soaring by 188 percent.
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