China Urges Visa and Mastercard to Reduce Card Transaction Fees

Photo : Bloomberg

The Payment & Clearing Association of China is currently engaged in negotiations with global card issuers, including Visa Inc. and Mastercard Inc., to lower the fees that local merchants incur when processing transactions made with foreign bank cards. A source familiar with the matter disclosed that China aims to reduce these fees from the current range of 2-3% to 1.5%. The negotiations, while ongoing, are subject to potential adjustments in the fee reduction terms.

Mastercard confirmed receipt of the proposal from the industry association and expressed commitment to collaborating with partners in the payment sector to decrease costs for Chinese merchants accepting foreign bank cards. However, Visa and the Payment & Clearing Association of China have not yet provided comments on the negotiations.

Stay informed with the latest news. Follow DXB News Network on WhatsApp Channel    

Earlier this week, the industry group issued a formal proposal to global card issuers outlining the fee reduction initiative. The statement, published on the association's website, emphasized the need for issuers to coordinate within their networks to implement preferential fees. This strategic move aims to incentivize local merchants to accept foreign bank cards more readily.

China's retail sector has increasingly embraced digital and cashless payments, yet many merchants remain hesitant to accept foreign bank cards due to high processing fees. The initiative to lower these fees aligns with China's broader efforts to enhance convenience for international visitors making payments within the country. In March, the State Council of China urged local authorities to facilitate wider acceptance of foreign cards among merchants, underscoring the government's commitment to promoting a more inclusive payment environment.