Macau: Beijing to crackdown on use of UnionPay
In the midst of China’s iron grip on currency control a nationwide audit and sanctions are on the makingChina.- The Chinese government will launch a nationwide crackdown on the illegal use of mobile “point of service” machines to swipe UnionPay credit cards.
As reported by the South China Morning Post, UnionPay plans to do a “detailed nationwide audit,” as stated in a company memo. The document also warns that “sanctions will be imposed by the ‘relevant authorities’ if a raft of new controls are not adhered to.” The newspaper also points out the case in Macau, “where devices have been rigged to conduct offshore transactions that actually show up in the mainland’s network as domestic transactions.”
China has a strict currency control and many retailers use the China Unionpay’s POS devices, or debit-card transaction terminals, to make cash transactions. In Macau if people swipe their UnionPay credit cards on a mobile POS, the transactions is registered as being conducted in mainland China as a domestic transaction. Thus, the government considers that those international transactions leak capital out of China.
With the new measures all POS device licensees will have to register their existing mobile devices, and also hardware and software manufacturers must have their devices validated by China UnionPay.