With the approval of the People’s Bank of China,ChinaUnionPay will initiate its Renminbi card acceptance in South Korea,Thailand and Singapore on January 10, 2005. By then, Renminbi bank-cards withthe company logo “Yin Lian” will be accepted on automatic teller machines (ATM)or points of sales (POS) marked with the same logo in the above statedcountries—a step outside China in real terms after ChinaUnionPay establishedits Renminbi card acceptance in Hong Kong and Macao respectively on January 18and September 8, 2004.
With this move, card holders may enjoy safe, efficientand convenient payment service for travel and business consumption in foreigncountries like shopping, dining, accommodation etc; economic, trade andpersonnel exchange between China and the mentioned countries will be promoted;and closer cooperation between the Chinese bank-card agencies and those inforeign countries will be forged. Today, as economic and financialglobalization evolves, the Chinese payment system has become an integral partof international settlement system. The acceleration of theinternationalization of “Yin Lian” card and the development of international acceptanceof Renminbi bank-card are important steps in coping with economic and financialintegration and encouraging the Chinese commercial banks and bank-card agenciesto actively participate in international competition and improve their servicenetwork. They also represent a strategic move in upgrading the overallcompetitiveness of the domestic bank-card industry.
The development of bank-card bears significance inreducing the circulation of cash, lowering transaction costs, encouragingconsumption, enlarging tax base, supporting relevant industries, carryingforward the work against money-laundering and cultivating good image in theworld community. The People’s Bank of China has long been dedicating qualityfinancial service to the society and accelerating the healthy development ofbank-card business. With concerted efforts, the issuance and transaction volumeof bank-card keeps growing, building upon the achievements of networkconstruction, card acceptance is tangibly improved and the industrial chain ofdiversified market players has taken shape. China has the greatest potentialfor global bank-card business. An expanding international exchange and agrowing number of outbound travelers will contribute to the expansion ofRenminbi bank-card acceptance to countries and regions in need.
As stipulated by the People’s Bank of China and theState Administration of Foreign Exchange, Renminbi “Yin Lian” cards are limitedto payment incurred under current account like shopping, catering, accommodation,transportation, medicare and small amount cash withdrawals in foreigncountries. ChinaUnionPay will improve systems restrictions on the merchantsaccepting Renminbi cards in the overseas market, prohibiting transactionsrelated to gambling, transbank fund transfer or under capital account and setquota limit for transactions possibly related to trade and some specialnon-trade services.
At the initial stage, the following services will beprovided to card holders: payment at POS in Thailand, account inquiry andcash-withdrawal on ATMs and payment at POS in South Korea and withdrawal onATMs and payment at POS in Singapore. An enlarging market will lead to moretypes of transactions.
“Yin Lian” card transactions in Thailand, South Koreaand Singapore will be priced in local currencies. In accordance with the rulesgoverning forex management, ChinaUnionPay will further settle the transactionswith the issuing bank after converting the volume into Renminbi at the marketrate of the transaction day and the issuing bank will then deduct the amountfrom the Renminbi account of the card holder immediately. The card holder willnot be charged for consumption at overseas POS and will only pay certaincharges for cash withdrawal from an ATM.
