A group of Chinese regulatory bodies and the country’s central bank jointly announced Friday that effective Sept. 30 they will reduce fees totaling about $3.7 billion annually that particularly affect small businesses and micro-enterprises.
The directive “further guides the payment industry to transfer profits to the real economy, reduces the operating costs of market entities, and optimizes the development environment of the real economy,” a Google Translate version of the announcement states.
One change: authorities will have commercial banks waive account-management fees for small businesses, including very small operations, and also eliminate settlement fees on transactions.
Another change, as described by Google Translate: Reduce (remninbi) transfer and remittance handling fees for transactions of less than 100,000 yuan, or roughly $15,496. The Peoples Bank of China — the country’s central bank — is also directing clearing agencies to implement discounts on some transactions.
Additionally, authorities are ordering commercial banks to eliminate some charges, such as those for processing checks, for small businesses.
Finally, authorities instructed parties involved in the processing of debit and credit card transactions to cut fees for small businesses by 10 percent. The directive states: “For preferential merchant-issuing bank service fees, the network service fee will continue to be discounted at a discount of 7.8% on the basis of the current government guidance price. Acquiring institutions should simultaneously reduce the acquiring service fees for merchants, and effectively transfer the benefits of card issuing banks and bank card clearing institutions to merchants.”
The duration of the fee changes ranges 3 years to “long-term,” in Google Translate’s language.
The directives call for commercial banks and some other entities to, in Google Translate’s words, “conduct a comprehensive self-examination of the payment handling fees and charges, and earnestly clean up the repetitive, bundled, and non-substantial service charge items” and added: “Commercial banks and payment institutions must not increase payment handling fees in disguise by adopting methods such as raising first and then lowering, passing on costs, etc.”
The regulators also called for more fee disclosure.