The Chinese central bank in tandem with a slew of other top financial authorities in China has issued an order for reductions in payments processing fees, following calls from Beijing earlier in the year for cuts to the operating costs for small businesses.
On 25 June the People’s Bank of China (PBOC), the China Banking and Insurance Regulatory Commission (CBIRC), the National Development and Reform Commission (NDRC) and the State Administration for Market Regulation (SAMR) jointly issued the “Notice Concerning Reducing Micro and Small Enterprise and Individual Industrial and Commercial Registrant Payments Processing Fees” (关于降低小微企业和个体工商户支付手续费的通知).
According to PBOC a total of nine fee reduction measures will officially come into effect on 30 September 2021, covering five areas including:
- Bank account services.
- Renminbi settlement.
- Electronic banking.
- Bank swipe cards.
- payments account services.
PBOC said that it would also work with CBIRC to unveil long-term measures to reduce processing fees for inter-bank ATM withdrawals.
The Chinese central bank estimates that the measures will reduce payments processing fees for the general public by around 24 billion yuan (approx. USD$3.72 billion), including over 16 billion yuan in reductions for micro and small enterprises and individual industrial and commercial benefits.
According to PBOC this will “help to reduce fund circulation costs, further optimise the business environment, expedite expansions and quality improvements to consumption, and play a positive role in driving high quality growth of the economy.”
The move comes after the Chinese central government outlined “appropriate reductions in micro and small-enterprise payments processing fees” in its 2021 Government Work Report (政府工作报告) released at the start of the year.
“In recent years, all parties to the payments sector have continually optimised payments services supply, and actively launched fee reduction and profit transfer measures,” said PBOC.
“In the wake of the Novel Coronavirus pandemic, PBOC encourages and guides payments services providers to reduce fees and transfer profits, and ease the difficulties of market actors in key regions and industries and for micro and small-enterprises.”