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China to MasterCard: No renminbi transactions

June 5, 2013

The People's Bank of China has told MasterCard that it may not process cross-border transactions in renminbi, and has told online payment platform EPayLinks that it must stop issuing renminbi-processed cards on behalf of MasterCard.

"No payment institution is allowed to co-operate with foreign card companies in developing cross-border payment businesses involving renminbi bank accounts or renminbi payment accounts," the Chinese central bank ruled in a document obtained by the Financial Times. 

"Foreign currencies must be used when clearing and settling domestic acquisitions made by people holding foreign credit cards."

Last year, the World Trade Organization ruled that China was discriminating unfairly against foreign electronic payment providers by granting its own UnionPay network a monopoly on renminbi transactions.

The Chinese central bank's edict brings into question the country's intention to abide by the WTO judgment. Chinese media have said that China is studying the ruling and may issue revisions to its domestic payments policy next month.

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