China’s Central Bank Encourages Local Businesses to Accept Foreign Payment Cards

China, the world’s second-largest economy, is taking significant steps to make it easier for foreign visitors to use their bank cards in the country. The People’s Bank of China (PBOC), the country’s central bank, has encouraged banks and local businesses to accept foreign bank cards, according to Zhang Qingsong, the deputy governor of the PBOC.

Zhang’s comments, which were exclusive to CNBC, come as Beijing has stepped up efforts to encourage visits from foreign tourists and business people. In recent months, China has enacted visa-free travel policies for residents of several European and Southeast Asian countries, following stringent border controls during the pandemic.

Mobile pay, which took off in China in the last several years, has been convenient for locals to use. However, financial system restrictions have made it difficult for foreigners to make payments. Shopping malls have increasingly preferred not to accept foreign credit cards. But that’s starting to change.

Last summer, the two dominant mobile pay apps, WeChat and AliPay, started allowing verified users to connect their international credit cards. Tencent owns WeChat, while AliPay is operated by Alibaba affiliate Ant Group.

Zhang acknowledged that foreign visitors care about their privacy and have put in place measures for information protection. He also mentioned that when using Alipay or WeChat Pay, foreign visitors do not need to provide ID information if their total annual transaction volume is under $500. It is estimated that over 80% of transactions fall below this threshold. The PBOC is also considering raising the $500 threshold in the future.

On Monday, Zhang and other officials attended an event at Beijing Capital Airport to formally open a payments service center for visiting foreigners. While their public remarks mentioned the digital yuan, they focused on discussing the availability of cash currency exchange, greater acceptance of overseas cards, and more mobile pay support.

The number of travelers in and out of mainland China has continued to improve but both remained below 2019 levels. Foreign financial services businesses have also started to see improved access to China, after years of waiting during which international companies criticized Beijing for favoring domestic players until they grew large enough.

Mastercard in November announced its joint venture in China received approval from the PBOC to begin processing domestic payments. The venture waited nearly four years since its application to begin preparations was approved in principle.

China’s plan for supporting foreigners’ payments in the country will focus on allowing card transactions for large payments and mobile pay for smaller amounts. Users of 13 foreign mobile wallet apps can also directly use QR payment codes in China, according to Zhang.

At the same time, cash is always available and accepted. Ant Group in September said users of 10 major mobile payment apps in countries such as Singapore, South Korea, and Thailand could use the same apps to scan AliPay QR payment codes in mainland China, a product the company calls Alipay+.

In conclusion, China’s central bank is encouraging banks and local businesses to accept foreign bank cards, making it easier for foreign visitors to use their bank cards in the country. This move comes as Beijing has stepped up efforts to encourage visits from foreign tourists and business people. The PBOC has acknowledged the importance of privacy protection and has put in place measures to ensure information security. The number of travelers in and out of mainland China has continued to improve, and foreign financial services businesses have started to see improved access to China. The plan for supporting foreigners’ payments in the country will focus on allowing card transactions for large payments and mobile pay for smaller amounts. Users of 13 foreign mobile wallet apps can also directly use QR payment codes in China.