China’s UnionPay bank card payment network is taking aim at money laundering by tightening checks on certain transactions conducted in Macau.
Reuters reports that growing numbers of Chinese visitors use the state-backed card to evade the government’s currency controls and illegally spirit billions of dollars into the casino enclave through fake sales. These are conducted at the clusters of jewelry and watch shops surrounding the casinos that charge commissions to allow people to swipe their cards for non-existent purchases.
The total value of UnionPay transactions in these shops in 2012 was roughly $45 billion, according to a classified Macau central bank report obtained by Reuters, a figure exceeding total gambling revenues that year.
According to China’s state news agency Xinhua, UnionPay has imposed a limit on card transactions in Macau and has set up a system to monitor large, abnormal transactions and high-risk merchants. The company has suspended the business of 20 merchants with “hidden perils” in recent years.
Macau merchants also are routing UnionPay transactions electronically back across the border to China to escape the scrutiny of Macau authorities, a problem the company began to address last year by cracking down on 49 such merchants using UnionPay card-swiping machines that had racked up sales of 1.86 billion yuan (US$302.7 million), Xinhua said.
