In recent years, the bankcard industry of our country has developed rapidly, where the bankcard issuance has increased greatly, the acceptance environment has been obviously improved, the objective of bankcard network interchangeability has been basically realized, and a bankcard industry chain as constituted by diversified market participants has been initially formed. However, the bankcard industry of our country still remains at the primary stage, and, compared with developed countries, there is still a comparatively large discrepancy in such respects as the frequency of using bankcards, the proportion of consumption with bankcards, and the popularization rate of bankcards for merchants. At the same time, there exist such extruding problems that the institutional construction of relevant laws lags behind, the industrial supporting policy is insufficient and the bankcard acceptance market is irregular. In order to promote a fast and sound development of bankcard industry and popularize bankcards, we hereby put forward the following opinions:
I. The Guiding Ideology and Principles of Bankcard Industry Development
The development of bankcard industry is a project that benefits our country and people and has a great significance on decreasing cash circulation, reducing dealing costs, encouraging consumption, enlarging taxation, promoting the development of relevant industries, reinforcing the anti-money-laundering work and improving our international image.
The guiding ideology of bankcard industry development is: In accordance with the requirements of providing a high-quality financial service for building an all around well-off society, we shall set up an objective of providing a safe, widespread, quick and high-quality bankcard service, and, through improving the legal institution, fostering the industrial support, advancing technical means, improving the bankcard utilization environment, strengthening the protection for the rights and interests of bankcard holders and regulating the market order, we shall promote a fast and sound development of the bankcard acceptance market, effectively advance the competitiveness of our bankcard industry, reduce risks to the largest extent so as to lead our bankcard industry into a favorable. favorable development orbit
The principle of developing bankcard industry is: Combining the governmental promotion, industrial self-discipline and market mechanism; combining a overall planning with a step-by-step implementation; combining development with regulation; combing an overall development with focused promotion; a combination of strengthening the construction of bankcard industry infrastructure, fostering the habit of using bankcards and encouraging consumption by using bankcards; a combination of developing bankcard industry and enhancing the service quality of banks; a combination of enhancing the risk prevention level for bankcard safety and strengthening the safety education of bankcard holders; and a combination of safeguarding the legitimate rights and interests of bankcard holders as well as accelerating the development of bankcard industry.
II Work Emphasis on Promoting the Development of Bankcard Industry
(I). Improving the Legal System and Building a Favorable Institutional Environment
The State Council is enjoining the relevant departments to deliberate and draft the Regulations on Bankcards as quickly as possible so as to accelerate the statute building for the administration of business operation. The relevant departments shall, according to the functions and duties and power limits, formulate the relevant supporting regulations and rules. The rights, liabilities and obligations of all participants shall be clarified and the legitimate rights and interests of the parties concerned shall be ensured; the issuance, use and acceptance rules of bankcards shall be unified, the payment by bankcards shall be regulated and the requirements on risk control and information safety shall be clarified so as to effectively prevent payment risk.
(II). Meeting the Demand and Improving the Varieties and Functions of Bankcards
1. Encouraging to popularize business cards: The governmental departments at all levels and the budget instrumentalities as affiliated thereto shall actively take lead in using bankcards. Such expenditure of public affairs as administrative funds and travel allowances shall be paid by means of bankcards so as to enhance the transparency of the expenditure of budget funds and strengthen the supervision and control of the expenditure for public affairs
2. Continuing the development of debit cards and developing credit cards steadily: We shall further perfect the functions of debit cards, enhance the service quality of debit cards, and promote the development of debit cards. We shall develop credit cards in a steady manner on the precondition that the risk of credit cards is effectively prevented.
3. Expending the utilization room of bankcards and promoting the application of IC cards of banks: We shall promote an organic combination of bankcard functions and the application thereof in any other industry so as to realize resources sharing and harmonious development. We shall regulate such electronic payments as internet payments and mobile payments that use bankcards as the medium in an orderly manner so as to promote a healthy development thereof. We shall actively develop the varieties of bankcards that would satisfy the demands of different groups and satisfy the individualization of clients. The People’s Bank of China shall, according to the new industrial standard of China’s Criterion on Financial Integrated Circuit (IC) (2005), promote the application development of IC bankcards.
(III) Promoting a Fast and Sound Development of Bankcard Acceptance, and Enlarging the Range thereof
1. Reinforcing the construction of bankcard acceptance market, To improve the bankcard utilization environment and to promote the popularization of bankcards application shall be the core work of developing the bankcard industry. The market-based economic tools shall play a dominant role and shall be supplemented by necessary governmental guidance. We shall strive to realize the goal that, by 2008, 60% of those merchants whose annual business volumes are above 1,000,000 Yuan will have accepted bankcards and bankcards will have been accepted in all the key business districts and commercial streets, star hotels and key tourism sceneries of large and medium cities and that the consumption by using bankcards in large and medium cities will have accounted for around 30% of the total social retail sale consumption.
2. Regulating the development of the bankcard acceptance market: We shall clarify the rights, obligations and liabilities of such market participants concerning bankcard business operation as bankcard issuer, bankcard organizations(or bankcard network), acquirer, bankcard holders, merchants who are engaged in special arrangement and specialized service organizations according to the principle of compliance of rights and obligations so that the said market participants may take on their corresponding risks and liabilities. We shall strengthen the administration over the acceptance market in order to ensure that all the bankcards issued by issuer could be accepted. We shall improve the specified professional service system, reinforce the administration and risk control of contract-out of bankcard business operation and enhance the level of specialized service.
3. Establishing and improving a reasonable charging and pricing mechanism: We shall uphold the principle of reasonable charge for banking service, give comprehensive consideration to factors of costs, profits and risks, take the interests of all participants into account and establish a scientific and reasonable bankcard pricing mechanism. The price shall be set through negotiations between acquirer and the merchants thereof according to the development requirements of marketization. In order to encourage merchants to accept bankcards, the local banks may, in light of such factors as the consumption amount of merchants by using bankcards, establish a proper awarding mechanism. Commercial banks shall scientifically formulate a financial management system for bankcards with strict cost accounting so as to lower costs.
4. Elevating the popularization rate of bankcard acceptance by commercial enterprises: Such departments as the Ministry of Commerce shall initiatively guide such retail and service industries as commerce, tourism and catering to accept bankcards.
5. Enlarging the range of bankcard acceptance: The relevant departments shall encourage the institutions of public affairs to actively accept bankcard so as to promote the application of bankcards in such charging fields of public affairs as water, electricity and gasoline, and promote such fields as the ticket selling of civil aviation, railways, highways, and hospitals, schools and gasoline filling stations that is closely related to the general public and use huge amount of cash to accept bankcards.
6. Exploiting the overseas Renminbi (RMB) bankcard market: We shall deliberate and promulgate the relevant policies and measures to support the expansion of the acceptance network of RMB bankcards to overseas so as to encourage the expansion to those countries and areas that have the demand of utilization and establish an international network of RMB bankcard acceptance. Commercial banks and bankcard organizations shall expand the RMB bankcard acceptance network to overseas in a positive and steady manner and take effective approaches to prevent risks in foreign exchange, cheating or technology.
(IV) Encouraging Market Competition and Strengthening Service Conscientiousness
1. Encouraging competitiveness and establishing a market operation mechanism: We shall bring the basic function of market in allocating resources into full play, introduce a competitive mechanism in such links as the issuance, acceptance, information transition, and arrangement and placement of machines and tools, etc., prevent monopolization, encourage organs and organizations meeting conditions to participate in the construction of bankcard acceptance market, and create a market environment with fair competition. Commercial banks shall grope for and reform bankcard operation mode, reduce the cost, and enhance the competitive edge according to the requirements on establishing modern financial enterprise system.
2. Strengthening awareness of service, and improving service quality: Related market participants of bankcard business shall strengthen communication and harmonization, conduct close cooperation, and take maintaining the lawful rights and interests of cardholders as an important content of bankcard services. Commercial banks shall establish service standards, service flow and service specifications meeting market and customer demands, and attract merchants to accept bankcard and the public to use bankcard.
(V) Expanding network interchangeability Scope and Improving Network Operating Efficiency
1. Consolidating and improving networking achievements: We shall conclude and promote the experiences in network interchangeability in recent years, and further expand the scope of network interchangeability to all cities of over prefecture and city levels as well as developed county-level cities; ensure all bankcard machines and tools to meet specifications and standards related to network interchangeability, strictly persist in the principle of “one machine for one counter” and realize resources sharing; seize on perfecting and implementing the technical standard for RMB bankcard of our country, and strengthen promoting the technical standard for RMB bankcard of our country which was made according to international specifications; new RMB bankcard issued by commercial banks must meet this technical standard; and try to complete the re-issuance of the existing cards of not this standard.
2. Improving the operation quality of transaction network: Related market participants of bankcard business shall ensure the operation efficiency of internal network and cross-bank transaction network; telecom operation enterprises shall ensure the expedite communications of transaction network, and strive for realizing up to over 96% success rate of national cross-bank transactions in 2008. Also, keep improving service level, and accelerate the collection of payment of consumption; establish a high-efficiency work mechanism for treatment of errors, complaints and disputes, improve the efficiency of the ratio of error treatment, and protect the lawful rights and interests of cardholders.
(VI) Strengthening Bankcard Risk Management, and Establishing Risk Prevention Mechanism
1. Related departments shall accelerate establishing personal credit system according to the general requirements of the State Council on the construction of social credit system, and realize the resources sharing of bankcard undesirable information between the People’s Bank of China, commercial banks and related departments.
2. The People’s Bank of China and China Banking Regulatory Commission (CBRC), according to respective responsibilities, shall strengthen the management on technical risks of bankcard, establish and perfect bankcard technical risks management system, adopt effective technical measures to prevent bankcard falsification and fraud transactions, and establish and perfect the report & filing, early warning and informing system of bankcard cases; track and study the international trend of transfer from bank magnetic stripe card standard to chip card standard, make related strategies according to the guidelines of “active response and cautious implementation”, and drive the development of electronic information industry of our country.
3. Related departments shall standardize the admittance management of bankcard, establish and perfect credit card risk supervision index system; effectively prevent commercial banks from disorderly competition and blind card issuance, and make their card issuance on speaking terms with their risk management ability and internal control level.
4. Related departments shall strengthen the admittance and supervision on bankcard data processing and related business outsourcing. Especially for the issues about that foreign-funded organs deal with related businesses at home, there shall be clear regulations, so as to ensure the safety of transaction information and customer information.
5. The Ministry of Public Security, together with such departments as the People’s Bank of China, China Banking Regulatory Commission, the State Administration of Foreign Exchange, and commercial banks, etc., shall establish an information communication mechanism and case cooperation mechanism for preventing and cracking down bankcard crimes; persist in paying equal attention to prevention and attacking, and executing standardization and governing simultaneously; and make efforts to prevent bankcard crimes from the source.
6. Commercial banks shall strengthen internal safety risks management, and improve the risk prevention and anti-fraud ability from the aspects of technical means, business flow, internal control system, merchant management, training and education, etc.; pay much attention to credit risk and fraud risk in opening of credit card business, and bring the functions of social credit service organs in preventing credit risks into full play according to related credit management laws and systems; and take ensuring cardholders to use bankcard safely as an important content of risk prevention.
7. Related market participants of bankcard business shall practically monitor bankcard transactions and report large-amount suspicious transactions according to Anti-money Laundering Provisions and other related regulations; and shall prevent law breakers from using bankcard to deal with criminal activities such as money laundering, etc., and to transfer illegal funds by crossing national boundaries through perfecting the systems and technical measures.
(VII) Making Industrial Excitation Policies, and Strengthening Industrial Support
1. Studying and issuing financial support policies: The Ministry of Finance and the Station Administration of Taxation, together with related departments, shall positively study and make related preferential taxation policies.
2. Strengthening cooperation in Golden Card and Golden Tax Projects: We shall promote the information exchange between Golden Card and Golden Tax Projects, and promote the sharing of information resources and technical services. The Station Administration of Taxation, together with Ministry of Information Industry and the People’s Bank of China, shall positively cooperate with the trial out in selected units and promotion of the financial tax-control POS with the function of accepting bankcard.
3. Guiding enterprises to reduce the cost of communications: The Ministry of Information Industry shall encourage telecommunications operation enterprises to execute preferential policies for communications cost of bankcard transaction according to market operation methods.
4. Supporting bankcard-related industrial development and technical innovation: We shall support the development of various high-tech industries closely related to bankcard industry, such as communications, IC-manufacture, software development, and operation services, etc. As determined, related enterprises may enjoy various preferential policies of our country for encouraging the development of software industry and integrated circuit industry. Also, we shall strengthen patent protection for various technical and business innovations related to bankcard.
(VIII) Strengthening Bankcard Propaganda and Education
We shall make sufficient use of various news media to promote and popularize bankcard, and to conduct propaganda and education on preventing and cracking down bankcard crimes, so as to make the social public commonly grasp basic common sense, active functions, and knowledge about safety in utilization of bankcard, etc., strengthen their consciousness and initiative to participate in and support bankcard and to prevent crimes, and create a public opinion environment beneficial for the healthy development of bankcard industry.
III. Strengthening Organizing and Leading, and Forming Resultant Force of Policies
The development of bankcard industry involves with a very extensive scope. Each department shall pay much attention to it; uniform the thoughts; sufficiently recognize the important significances of the development of bankcard industry toward improving the payment environment, expanding consumption, preventing tax dodging and evasion, maintaining market order and comprehensively constructing an affluent society; strengthen organizing and leading; and practically take related responsibilities. The State Leading Group of Golden Cards Project and its Office shall strengthen the harmonization work, and do a good job in related supervision and inspection. At the end of 2006, RMB bankcard business was comprehensively open up to the outside world. Our country’s bankcard industry has been in the face of relatively great challenges for this reason, and must improve the international competitiveness of the industry within limited time. Also, Beijing Olympics 2008 and the World Expo 2010 Shanghai have brought forward urgent requirements on perfecting the card utilization environment. Related departments of each province, autonomous region and musicality directly under the Central Government shall establish and perfect a leading and harmonization mechanism for bankcard work, uniformly plan and guide the bankcard work in local area, make and fulfill related policies and measures, assort with solving highlighted problems in the development of bankcard industry, and instruct and promote the development of bankcard industry in local area.
The People’s Bank of China
The National Reform and Development Commission
The Ministry of Public Security
The Ministry of Finance
The Ministry of Information Industry
The Ministry of Commerce
China Banking Regulatory Commission
The Station Administration of Taxation
The State Administration of Foreign Exchange
April 24, 2005