China’s central bank is set to cut fees on purchases made through bank cards to stimulate consumption and ease firms’ operational costs.
People’s Bank of China (PBOC) said that the development that will take effect on 6 September would result in a CNY7.4bn ($1.14bn) cut in the fees merchants pay in a year.
According to National Development and Reform Commission (NDRC) and the PBOC, rates charged by banks for debit cards will be capped at 0.35% of a transaction amount, while those on credit cards will be no more than 0.45% of the amount swiped.
Prior to this new policy, lenders could charge a maximum 0.9% of a transaction amount as service fees.
By the end of 2015, China issued more than 5.4 billion bank cards, and over 16 million businesses linked to the bank card network used point-of-sale (POS) machines.