The Macau government will not order the removal of existing UnionPay card-swipe terminals from jewelry stores and pawnshops in casinos, but the retailers will not be allowed to install new ones, the city’s top financial official said yesterday.
The comment by Secretary for Economy and Finance Francis Tam put an end to speculation that the government had set a deadline of 1st July for the shops to remove the terminals, which have been in the spotlight in recent weeks amid news reports that unauthorized terminals are being smuggled into the city from mainland China in large numbers to assist mainland gamblers in evading the country’s strict currency controls.
“We have made a decision that starting July there will be no more increase in the card activities in all businesses or operations inside casinos, meaning there will be no increase of card terminals in jewelry and watch stores or other financial institutions on casino floors,” Mr Tam said.
He added that “After reviewing [the new measure] for a few months we do not rule out that we will completely suppress all such card transactions on casino floors,” and he said “three to four months” would be enough time to consider whether to do so.
He did not clarify whether “transactions” refers to UnionPay terminals only or other swipe devices as well.
Reports of a Beijing-directed crackdown on illegal use of the popular state-backed payment card has sent jitters through the investment community, adding to a spate of negative headlines in recent weeks that has sent the stocks of Macau’s six Hong Kong-listed casino concessionaires tumbling. The worry over UnionPay is that any serious restrictions on card use would dampen the territory’s world-leading gaming revenues, which are fueled to no small degree by the ability of mainland visitors to take more cash out of China than is legally allowed.
Legally, mainland citizens can take 20,000 yuan (US$3,200) out of the country per visit and withdraw up to 10,000 yuan a day from cash machines outside the country. Visitors to Macau are known to get around the limits by buying expensive items in stores using their UnionPay cards which they then return for cash refunds minus a small commission to the store. Government figures show illegal UnionPay transactions in Macau totaling US$22.5 million from January through May, which is only a fraction of an underground market that may have allowed the yuan equivalent of US$6.4 billion to leak out of China last year, according to reports in the South China Morning Post and elsewhere, or about 14% of the $45 billion the casinos made in gaming revenue.
Macau authorities also have vowed to more closely monitor the roles that state-owned banks and at least one mainland-based payments processor may have played in facilitating the transactions.
Mr Tam did not address that issue specifically but said, “We have an international obligation as well as our own statutory requirements to supervise and curb money laundering and terrorism financing, which we have put in the first place over other matters or so-called impacts.”
The total of all transactions conducted with UnionPay cards in Macau in 2013 amounted to US$22.5 billion, according to a source cited by Reuters.
