Macau urges banks to curb use of UnionPay cards to cut illegal flow
Print Edition
MACAU authorities have urged banks to restrict the use of China UnionPay cards which racked up US$22.5 billion in transactions last year, a person with direct knowledge of the matter said, in a bid to curb the increasingly large amounts of money being illegally taken out of the Chinese mainland.
Macau is the world’s largest gambling market, and a popular destination for mainland gamers who bet up to millions of yuan at a time.
The source attended a high-level meeting organized by the Monetary Authority of Macau last week during which it laid out guidelines to restrict the use of UnionPay cards at shops selling jewelry and other luxury items located on casino gaming floors.
Banks were also urged to restrict loans or funding to retailers identified by UnionPay as engaging in illegal transactions, the source said.
“We don’t know yet whether all the existing stores will be closed, or whether only the newer ones will be closed ... We will only know for sure when they send us their formal guidelines,” the source added.
Chinese mainlanders, who are only allowed to take up to 20,000 yuan, or US$3,200, out of China in cash a day, often get around this limit by pretending to purchase expensive items from such stores using their UnionPay cards.
Instead of actually receiving the items, the punters are given hard cash.
The source said the monetary authority didn’t specify the exact scope of the curbs or say whether the guidelines were binding or carried any penalties. Any measures would take effect on July 1, the source added.
UnionPay has already identified about 70 retailers it suspects of fraudulent transactions in Macau, Hong Kong and Japan, according to a company list. An updated blacklist of merchants was expected to be published along with the new Macau rules, according to the source.
Any measures that would reduce the amount of mainland money coming into Macau would impact the city’s economic growth because of its overwhelming dependence on Chinese mainland gamblers.
Macau’s gambling revenues grew by almost 20 percent in 2013 to US$45 billion. This year, Fitch analysts expect the revenues to grow by 12 percent.
The one-hour meeting with representatives of banks in Macau and other UnionPay clients was hosted by Wilson Wong, deputy director of the banking supervision department at the Monetary Authority of Macau, according to the source.
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