China asks Visa, Mastercard to cut transaction fees
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China is pushing for Visa and Mastercard to lower their bank card transaction fees in the country, as part of an effort to facilitate payments for foreign visitors, Bloomberg News reported, citing a person familiar with the matter.
According to a report published on Friday, the Payment & Clearing Association of China is negotiating with global card issuers, including Visa and Mastercard, to lower fees charged on foreign card transactions.
The association proposed trimming the fee to 1.5 percent from 2-3 percent, the report added.
Mastercard told Bloomberg that it had received the proposal from the industry association and said it would work with partners to lower costs for local merchants accepting foreign bank cards.
Visa and Mastercard did not immediately reply to Reuters’ requests for comment.
According to a statement posted on its website on Tuesday, the industry group issued a proposal earlier this week to global card issuers on the fee cut without disclosing details of the price cut.
Questions & Answers
Q.Which specific body in China is negotiating with Visa and Mastercard about these fee reductions?
Which specific body in China is negotiating with Visa and Mastercard about these fee reductions?
The Payment & Clearing Association of China is currently negotiating with the global card issuers. This industry association proposed trimming the transaction fee to 1.5 percent from the current 2-3 percent range.
Q.What is the primary motivation behind China's request for Visa and Mastercard to reduce their transaction fees?
What is the primary motivation behind China's request for Visa and Mastercard to reduce their transaction fees?
China's main objective is to make payments easier and more accessible for foreign visitors in the country. Lowering these fees is seen as a way to facilitate these transactions for international tourists and business travellers.
Q.Has either Visa or Mastercard publicly committed to the proposed fee reduction?
Has either Visa or Mastercard publicly committed to the proposed fee reduction?
Mastercard has acknowledged receipt of the proposal from the industry association and stated it would work with partners to lower costs for local merchants. Visa has not yet responded to requests for comment regarding the proposal.
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