In order to fully implement the decisions and arrangements on “appropriately reducing payment fees for micro and small businesses (MSBs)” in the Report on the Work of the Government (2021) and the requirements of the State Council to lower cross-bank service charges of cash withdrawal on automated teller machines (ATMs), the People’s Bank of China (PBC), China Banking and Insurance Regulatory Commission (CBIRC), National Development and Reform Commission (NDRC), and the State Administration for Market Regulation (SAMR) recently released a set of measures to reduce fees with an attempt to further surrender profits to the real economy.
In recent years, all parties in the payment sector have been constantly improving payment service supply, and have proactively put in place measures to lower fees and surrender benefits to the real sector. Since the outbreak of COVID-19, the PBC has been encouraging and guiding payment service providers to cut fees and surrender profits, so as to help specific regions, industries, and market entities such as MSBs weather difficulties. Based on a recent survey of nearly 50,000 MSBs and individual businesses, the PBC, jointly with CBIRC, NDRC and SAMR, focused on basic payment services, which the public are most calling for fee reduction of and are most frequently used, and introduced 12 fee-reducing measures that would take effect on September 30, 2021, which covered bank account services, RMB settlement, e-bank businesses, bank card swiping, and payment account services. In addition, the PBC worked with CBIRC in introducing long-term measures of lowering cross-bank cash withdrawal fees on ATMs, thus being adaptive to the needs of old-age care and medical services for people who change resident places and facilitating the use of cash for the public. Specifically, the fee-reduction measures that involve pricing by government or under government's guidance are elaborated in the Notice on Reducing Payment Fees for MSBs and Individual Businesses, which was jointly published by the PBC, CBIRC, NDRC and SAMR. Meanwhile, for those involving pricing by the market, the PBC and CBIRC will guide relevant sector associations to leverage self-discipline mechanisms and encourage commercial banks and payment institutions to step up efforts in surrendering benefits to enterprises and the public.
With the focus on MSBs and individual businesses, the fee-reducing measures benefit other market entities and financial consumers, while fostering benefit surrender, fee reduction and sustainable sector development. The relevant entities to implement fee reduction involve commercial banks, payment institutions and clearing institutions. According to preliminary calculation, with all measures put into place, they are expected to cut around RMB24 billion of service fees every year for market entities and the public, among which over RMB16 billion is for MSBs and individual businesses. The measures will reduce the costs of fund circulation, further improve business environment, increase the quality and scale of consumption, and eventually contribute to the high-quality development of the national economy.
Looking forward, the PBC, CBIRC, NDRC and SAMR will closely follow the implementation and the effects of the fee-reducing measures, and ensure that they directly reach the grassroots and benefit market entities. Based on the economic and social demands, as well as the development of the payment market, the authorities will constantly enhance the quality and efficiency of payment services, in a bid to better serve the development of the real economy and people’s livelihood.
