CRI听力:Bank Card Transaction Fee Reduced

The Central Bank here in China has announced plans to cut the bank card transaction fees for businesses this coming year.

CRI's Li Dong has the details.

The bank card transaction fee will be cut by 23 to 24 percent on average, according to the type business the merchants do.

The catering and entertainment business enjoys the highest fee cut, 37.5 percent. This category also includes merchants in jewelry, handicrafts, real estate and automobiles. The fee cut also covers other businesses. And the bank card swipe fees in the public welfare sector remains zero.

Because the banks charge the merchants, the fee cut won't affect individual consumers.

Lian Ping, chief economist of Bank of Communications says the purpose of the fee cut is to boost consumption. Lian Ping adds the fee cut won't have a big influence on banks' revenue.

"We estimate that the general impact of the fee cut this time on banks' revenue won't exceed 2 percent. The bank card business is growing at a fast pace. So the fee cut may slow the growth of the bank card business a little bit."

Li Minghong, CFO of Next Stage department store in Shanghai says their revenue from bank card consumption now occupies 55 percent of their total earnings. However, he also says their benefit from the fee cut is limited.

"The fee cut for department stores is low. The fee is reduced only by 0.12 percent. We estimate this change may only save about 2 to 3 million yuan in transaction fee expenses a year."

The catering business benefits the most from the fee cut. Li Keqin is manager of a restaurant in Shenzhen.

"The current transaction fee rate is 2 percent. If the rate is reduced to 1.25 percent, we can save 75 yuan a day. That's about 20 thousand yuan a year. The money can bring more benefits to our staff."

Zhang Chun, Dean of the Finance Institute of Shanghai Jiaotong University says the fee cut is a positive progress for the economy.

"The fundamental change is the marketization of banks' interest rates. The banks are making too much money with monopolies. The change frees the intermediate businesses. It's an inevitable trend in the long run."

Zhang Chun believes the fee reduction policy will be an effective incentive to boost the bank card consumption rate.

For CRI, I am Li Dong.