China to handle IC bank cards

The People's Bank of China assured foreign holders of IC bank cards that they will have no problem using their cards in China.

Magnetic stripes are still used for banks cards in most countries in the world including China. But they have given place to cards based on integrated circuit (IC) in Europe, South Korea and Japan. The so-called EMV standard was initiated by the three international bank card issuers, Europay, MasterCard and Visa.

An official with PBOC said that the central bank would organize commercial banks and China UnionPay to launch EMV studies this year. It plans to work out China¡¯s financial IC card standards Version 2.0 this year and an important forum on EMV in February.

The official confirmed that China is able to handle payment settled by foreign bank cards so that IC card holders can use their cards.

As to the much reported issue of fees charged on debit card holders by banks, the official explained that the government would not interfere commercial banks decision on whether their service were free or not.

The central bank is working with other departments on regulations for bank cards which is expected to be released at the end of this year after the approval of the State Council.

Last year's rise of 263 percent over the previous year marked the most staggering growth in the number of issuance in the history in China. 762 million cards had been issued by banks in China by the end of last year.

A research on 50 countries in the world has proved that every 10 percent increase in payment settled by bank cards brings 0.5 percent growth to the national economy. As learned 5 percent of retailing products sold were paid with bank cards in 2004, compared with 2.1 percent in 2001. In major cities like Beijing, Shanghai, Guangzhou and Shenzhen, more than 20 percent of the consumption is funded by bank cards.

By People's Daily Online