Macau urges banks to tighten controls on UnionPay transactions

The Macau Monetary Authority (AMCM) has urged Macau banks to tighten oversight of China Union Pay transactions as authorities tighten controls on illegal cash transfers from mainland China.

Macau authorities and China UnionPay Co. are reportedly cracking down on disguised transactions conducted in Macau to avoid strict cross-border funding controls in mainland China.

"Recently, AMCM has called on banks to further strengthen relevant risk management and ongoing customer due diligence in relation to card acquisition services," the financial authority told GGRAsia on Wednesday.

The regulator did not specifically say what measures had been taken, nor did it say to that extent. Media reports say guidelines have been introduced to restrict the use of UnionPay cards in shops selling jewelry and other luxury goods inside casinos.

On Tuesday, Bloomberg News quoted Ambrose Soufi, the chief executive of Macau casino operator SJM Holdings, as saying that bank regulators had ordered the removal of UnionPay card terminals to jewelers and pawnbrokers operating in casinos.

"We know that private shops in casinos have received such notifications from the Macau Financial Services Administration," So told the news agency.

No deadline has been confirmed for GGRAsia by AMCM, but sources citing media reports said financial regulators had set July 1 as the deadline for the terminal to be demolished.

Visitors to the mainland can only take 20,000 yuan ($3,211) out of mainland China in cash per day. However, gamblers regularly make purchases using their UnionPay cards at pawnshops or jewelry stores in Macau, and immediately return them in cash to solve this problem. The seller receives a commission on the first transaction.

Authorities have also been cracking down on unregistered portable UnionPay handsets. Macau police have arrested more than a dozen people in recent months after investigating the use of such card swipe devices. The devices are registered in mainland China and illegally smuggled into Macau, allowing payments to be recorded in domestic transactions, and thus incurring lower fees.

Casino operators in New York said any changes related to Union Pay would not have a significant impact on their businesses. However, several analysts believe the reported restrictions have affected public market gambling in recent weeks.

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