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China’s central bank encourages local businesses to accept foreign payment cards

A cafe at Beijing Capital Airport shows that customers can use Visa, Mastercard, the digital Chinese yuan and other payment methods.

CNBC | Evelyn Cheng

BEIJING — China is encouraging local banks and businesses to accept foreign bank cards and is considering other measures to make mobile payment even easier for international visitors, said Zhang Qingsong, vice governor of the People’s Bank of China.

“Banks and merchants (such as hotels, restaurants, department stores and even cafes) are encouraged to accept foreign bank cards,” Zhang said.

His written comments, exclusive to CNBC, come as Beijing has stepped up efforts to encourage visits by foreign tourists and businessmen. In recent months, authorities have enacted visa-free travel policies for residents of several European and Southeast Asian countries, following strict border controls during the pandemic.

Mobile payment has taken off in China in recent years. But while it has been convenient for locals to scan a QR code with a smartphone to pay, restrictions on the financial system have also meant that foreigners often find it difficult to make payments. Shopping centers increasingly prefer not to accept foreign credit cards.

But that has started to change in recent months.

Last summer, the two major mobile payment apps, WeChat and Alipay, began allowing verified users to connect their international credit cards, such as those from Visa. Tencent owns WeChat, while Alipay is operated by Ali Baba affiliate Ant Group.

“We are fully aware that foreign visitors care very much about their privacy,” Zhang said. “We take this issue seriously and have implemented measures to protect information.”

“Now, when using Alipay or WeChat Pay, foreign visitors do not need to provide identification information if their total annual transaction volume is less than $500,” he said. “It is estimated that more than 80% of transactions are below this threshold. We are also exploring the possibility of increasing the threshold to $500 in the future.”

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Zhang and other officials attended an event at Beijing Capital Airport on Monday to formally open a payment service center for visiting foreigners.

While his public comments mentioned the digital yuan, they focused on discussing the availability of cash currency exchange, greater acceptance of foreign cards, and expanded mobile payment support.

The number of travelers entering and leaving mainland China “has continued to improve, but both remain below 2019 levels,” Visa executives said on an earnings conference call in late January, according to a FactSet transcript.

Foreign financial services companies have also begun to see better access to China, after years of waiting during which international companies criticized Beijing for favoring domestic players until they grew enough.

Mastercard announced in November that its joint venture in China received approval from the People’s Bank of China to begin processing domestic payments. The company waited almost four years after its application was approved in principle to begin preparations.

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Zhang said China’s plan to support foreigner payments in the country would focus on allowing card transactions for large payments and mobile payments for smaller amounts.

Users of 13 foreign mobile wallet apps can also directly use QR payment codes in China, Zhang said, without naming the apps.

“At the same time, cash is always available and accepted,” he said.

Ant Group said in September that users of 10 major mobile payment apps in countries including Singapore, South Korea and Thailand could use the same apps to scan Alipay QR payment codes in mainland China, a product the company calls Alipay+.

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