Dual-label cards have made great contributions to the development of credit card market in China. When the clearing market in China is about to open, the relevant departments have once again emphasized the market rules that foreign currency single-label cards should follow. Although it has caused some pains to this kind of products, it is still of positive significance to the future credit card market in China.
Double-label credit cards with the logos of UnionPay, Visa, Mastercard and other international card organizations printed on the card face will gradually withdraw from the market in the future. A few days ago, the Payment and Clearing Association issued a "Specific Contents of Policies on Single-label Foreign Currency Cards and Dual-currency Cards", requiring banks to stop issuing new dual-label credit cards.
It is also reported that the central bank recently convened major banks and related bank card organizations to hold a meeting on the issuance management of foreign currency single-label cards and double-label cards. The meeting emphasized that foreign card organizations can only provide foreign currency bank card clearing services for cross-border transactions before obtaining the qualification of domestic clearing business. The main spirit of the meeting included reaffirming that foreign currency single-label cards can only be kept in foreign currency, and can be used by overseas entities or online merchants, and the domestic use scope is limited to repayment in accordance with the provisions of the State Administration of Foreign Exchange. Any form of transaction within the territory will be regarded as illegal. At the same time, the issuing bank needs to sort out the functions of foreign currency single-label cards that do not meet the regulatory requirements, and the scope of application of new foreign currency single-label cards also needs to be agreed in the agreement.
Although it is confirmed that the dual-label bank card will not be able to issue new products, the dual-label card that everyone is using at present can still be used normally, but the dual-label card cannot be renewed after the expiration of the validity period, and it needs to be replaced by a foreign currency single-label card. Therefore, the dual-label card will gradually withdraw from the historical stage of credit cards in China.
recall
Dual-label cards have been issued in China for 14 years.
The so-called double-label card means that two card organization logos appear on a bank card at the same time. For example, there are both UnionPay and Visa logos on the bank card. International card organizations cooperate with UnionPay to issue dual-label cards, and the Bin number starts with foreign card organizations. For example, Visa Kaka number starts with 4, and Master Card number starts with 51-55, but all of them are used in China as the clearing channel of UnionPay, and are settled in RMB. The common dual-currency credit cards are UnionPay +Visa, UnionPay +Mastercard, UnionPay +JCB and so on.
It is understood that the first dual-label card was launched by China Merchants Bank in December 2002, which is of epoch-making significance. Lu Jinhua, a senior expert on bank cards, said that dual-label cards are the product of a special era with China characteristics. China’s dual-label card has the characteristics of China, which solves the problem of how domestic residents spend their money overseas and at home when RMB is not freely convertible, and solves the problem of high threshold for traditional credit cards. In less than two years, China Merchants Bank has issued more than 1 million dual-currency cards, which has set a miracle in the industry. Since then, major domestic banks have followed suit and launched their own dual-label cards, bringing the dual-label cards into a period of rapid growth. Cardholders can travel and shop with only one credit card at home and abroad, and they feel very convenient.
remove doubts
Why stop issuing double-label credit cards?
In fact, these measures mentioned above are all aimed at implementing the Measures for the Administration of Bank Card Clearing Institutions jointly issued by the Central Bank and the China Banking Regulatory Commission. Article 22 of the Measures has clearly stipulated that if an overseas institution cooperates with a domestic bank card clearing institution to authorize the issuance of bank cards, it shall adopt the identification code of the issuer of the domestic bank card clearing institution. Overseas institutions shall not engage in RMB bank card clearing business in disguised form through cooperation.
Rong 360 credit card analysts believe that the main reason for stopping issuing dual-label credit cards is that it is a product of the transitional period. In the special period when UnionPay did not popularize foreign payment and settlement business and foreign card organizations could not enter China, banks jointly issued dual-currency credit cards with UnionPay and foreign card organizations to facilitate cardholders to pay at home and abroad.
At present, the RMB clearing market is about to open, and foreign card organizations are expected to enter China and obtain the corresponding qualifications for payment and clearing, which may also issue their own brand credit cards in China, and require commercial banks to take their own channels for RMB transfer and clearing. It is precisely because there are two card organizations behind a card that the ownership of dual-currency credit cards is controversial. According to international practice, a card can only belong to one card organization, and the card organization is responsible for the transfer and liquidation. Therefore, under the premise that the RMB clearing market is about to open, the suspension of issuing dual-currency credit cards is to "clear the way" for foreign card organizations to enter the domestic market and facilitate the transfer and clearing of various card organizations in the future.
In addition, some professionals told the Beijing Youth Daily reporter that the dual-label multi-card is a magnetic stripe card, which is easy to be cloned and stolen, and it is also a technical reason for its withdrawal from the historical stage. After 2002, major card-issuing banks issued a large number of magnetic stripe dual-currency cards, which missed the initial period of chip cards. More and more magnetic stripe dual-currency cards have increased the migration cost and difficulty of credit card chips in China.
In Europe, where chip cards have been migrated, many POS machines no longer accept magnetic stripe cards, which makes many domestic cardholders who travel with magnetic stripe dual-currency cards feel inconvenient. The general chip abroad is EMV standard, while UnionPay is POB standard with China characteristics, which cannot be unified on one chip. The popularity of chip cards only supports credit cards with a single settlement channel and logo. In the past, dual-currency cards that can choose settlement network could not be realized on chip cards, let alone migrated to chip cards.
So is it possible to issue a dual-label card using UnionPay Bin number? Relevant card organizers told the reporter of Beiqing Daily that this idea is feasible in theory, but it means that all international card organizations have to rebuild their systems overseas, which is very heavy and costly, and it will definitely not be completed in two or three years.
affect
Consumption abroad needs to bring two cards in the future.
The withdrawal of double-label cards from the historical stage also means that the convenience of "one card goes to the world" is over. In the future, if you want to have credit cards issued by UnionPay, Visa and Mastercard at the same time, you must apply for multiple credit cards.
Stopping issuing dual-label credit cards has little impact on cardholders who have no overseas credit card demand, but it will be inconvenient for users who often have consumption abroad demand. Because they need to apply for a single-label credit card from international card organizations such as Visa and Mastercard separately for consumption abroad. However, this kind of card can’t be used in China at ordinary times, and only UnionPay cards can be used in China. Therefore, in the past, one card can solve all the domestic and foreign credit card needs, but now it must be done with two cards.
In addition, for ordinary cardholders, the existing dual-currency credit cards often carry the card rights of foreign card organizations, and they can also enjoy the card preferential treatment provided by foreign card organizations. After the issuance of dual-currency credit cards is stopped, cardholders can no longer enjoy these rights and benefits if they only use UnionPay single-currency cards.
Some insiders said that the issue of stopping the issuance of double-label cards is only a document issued by the industry association for the time being, and there is no red-headed document from the authoritative department. Therefore, at this stage, banks have not stopped issuing new dual-label cards across the board. The existing dual-label cards can also be used normally until the expiration. Therefore, if there is a real demand and the dual-label card is more convenient, you can apply to the bank quickly, so that you can enjoy the convenience of the dual-label card at least in the next five years. Of course, the double-label card is a magnetic stripe card, and the card user needs to pay special attention to the safety of using the card.
question
Single-label foreign currency cards have limited use in China.
However, the issuance of single-label cards in China is not smooth sailing. After the efforts of all walks of life in recent years, we gradually feel the limitations of single-label cards.
First of all, the scope of use of single-label cards is very narrow. Apart from being used abroad, it can only be used in some rare places in China, such as high-end star-rated hotels, shopping malls and restaurants. On June 1st, 2015, Visa closed the transactions of Visa single-label cards issued by domestic banks in China. The foreign currency single-label credit card in hand can no longer be used in China except for overseas transactions. For people who don’t go abroad often, this kind of credit card tends to be marginalized. If they apply, they don’t have a chance to use it at ordinary times. If they don’t have a certain number of transactions, they will be charged an annual fee. If you don’t apply, it’s inconvenient to spend money when you want to travel abroad or on a business trip.
Secondly, except UnionPay card, other card organizations can’t bind Apple Pay to single-label cards issued in China, and the latest payment technology can’t be applied to these cards, which makes people feel sorry and can only envy friends and relatives abroad. The safety problem in daily consumption cannot be solved by adopting new technology, which makes people feel awkward.
Nowadays, many foreign currency single-label cards are issued and promoted under the slogan of "all-currency cards". The so-called all-currency card refers to the fact that the card no longer charges currency exchange fees when spending across currencies abroad. In many people’s eyes, the all-currency card is to spend Japanese yen in Japan, euro in Europe, or Thai baht in Thailand, but this is not the case. Most of the so-called all-currency cards are charged in US dollars and RMB. Generally speaking, foreign consumption is charged in US dollars, domestic consumption is charged in RMB, and some banks directly charge in RMB, regardless of the cardholder’s transactions at home or abroad.
Dual-label cards have made great contributions to the development of credit card market in China. When the clearing market in China is about to open, the relevant departments have once again emphasized the market rules that foreign currency single-label cards should follow. Although it has caused some pains to this kind of products, it is still of positive significance to the future credit card market in China.
Text/reporter Cheng Wei