News

China changes interchange rules

December 30, 2003

SHANGHAI - China's central bank has passed a new rule on bank card commission fees, and will cut the total charges on each cross-bank withdrawal via ATMs from the current 4 yuan (U.S. 48 cents) to 3.6 yuan.

According to a report in the Shanghai Daily News, the card issuing bank must pay 3 yuan to the acquiring bank and a 0.6 yuan network service charge to the bank union.

The new rule doesn't affect the charge on cardholders, according to the Daily News report, which cited an unnamed senior official with the People's Bank of China.

"That means the central bank doesn't set a ceiling for the charge, and the bank may transfer the entire 3.6-yuan cost onto the cardholders," he said.

Under the existing rule, the card issuer bank can charge its cardholders no more than 2 yuan.

In addition to ATMs, the new rule involves charges on transfer deals via point-of-sale machines, the official said. For example, fees for each transfer will be halved to a total 0.4 percent with supermarkets, gas stations and air ticket offices and reduced to 0.8 percent with other stores.

The new rule will take effect in March, according to the Daily News.