BEIJING, March 13 China's UnionPay bankcard
payment network has tightened checks on suspicious transactions
in Macau to combat money laundering, Xinhua cited the company as
saying on Thursday.
The move follows reports about the illegal use of UnionPay's
cards to obtain cash through fake sales.
"Unionpay has always paid a high degree of attention to risk
control in UnionPay cards and participated in joint efforts to
crack down on illegal activities, such as money laundering, to
safeguard overseas payments," China's state news agency Xinhua
quoted an unnamed senior UnionPay official as saying.
Despite this, the official acknowledged that "all major
bankcard brands faced the problem" of being conduits for
torrents of capital being funnelled into Macau's casinos, given
the importance of the gambling sector to Macau's economy, from
which 80 percent of the government's revenues are drawn.
Reuters published an in-depth report this week on growing
numbers of Chinese using state-backed UnionPay bankcards to
illegally spirit billions of dollars into the world's top
gambling market of Macau.
Clusters of jewellery and watch shops around Macau's casinos
have been allowing Chinese customers to swipe their UnionPay
cards for fake purchases in order to obtain hard cash - a way of
evading China's strict currency-export controls.
The illicit 'cashback' business has boomed alongside Macau's
gambling sector, now seven times the size of Las Vegas, bringing
with it the risk of money laundering.
The total value of UnionPay transactions in Macau jewellery
and watch stores in 2012 was roughly $45 billion, according to a
classified Macau central bank report obtained by Reuters, a
figure exceeding even Macau's total gambling revenues that year.
UnionPay was cited as saying in the Xinhua report that it
had set up a mechanism to monitor high-risk merchants and
large-sum card transactions, while suspending the business of 20
merchants with 'hidden perils' in recent years.
Despite this, the "cashback" business is still rampant in
hundreds of stores in and around the casinos, with authorities
having yet to take stronger enforcement action to crack down.
Working with commercial banks, UnionPay has imposed a limit
on card transactions in Macau and has set up a system to monitor
large, abnormal transactions, the official told Xinhua.
But the report acknowledged the growing problem of Macau
merchants routing UnionPay transactions electronically across
the border to China to escape the scrutiny of Macau authorities.
Since 2013, UnionPay had cracked down on 49 such merchants
using 55 UnionPay card-swiping machines, that had racked up
sales of 1.86 billion yuan ($302.7 million), Xinhua said.
The Chinese government has also stepped up its
anti-corruption campaign to help curb money laundering
activities and capital flight, the official was quoted as
(Reporting by Kevin Yao and James Pomfret; Editing by Catherine