Bank card swipe new rules to cut the industry cake 7.4 billion good behind who is advancing

Summary: Competition is a double-edged sword. Optimists see it's improvement in the customer experience, and pessimists are afraid of price wars and the possibility of triggering industry reshuffles.

[From the NDRC and the central bank's calculation of the handling fees of various merchants, the new regulations can save 7.4 billion for them every year. Behind the “profit” of merchants, it is actually the “letter” of the bank card industry under the “baton”. ]

Feng Enyuan, vice president of the China Cuisine Association, was very happy when he was interviewed by the media. He said that the new regulations on the bank card fee processing rate (hereinafter referred to as the "new rate"), which was implemented on September 6, have reduced the handling fee borne by the catering industry by more than half.

Feng En aided this statement. He estimates that the new tariff rate will reduce the cost of the food and beverage industry by about 2 billion per year. From the NDRC and the central bank's calculation of the handling fees of various merchants, the new regulations can save 7.4 billion for them every year.

This 7.4 billion is not from the sky. Behind the merchant's "profit" is actually the "letter" of the bank card industry under the "baton": the handling fee that the issuing bank can extract is generally reduced; the market-driven acquiring institution is opening the game and the smoke is gradually rising. .

The China UnionPay, the liquidator of the "monopoly" hat that has been detained for many years, not only has to face the opening of the liquidation market, the online liquidation has been robbed, the international licensing of brand licensing fees has not been expected, but also to be "guided pricing" online. Big chunks of profit.

Everyone in the market wants to maximize their own interests. Tension is always there, and the art of pricing is looking for a balance. The party that won the "new cake" is always beautiful, but behind it is the loss of the "cake" side.

However, there is also a new vitality under the agitation. Abandoning the catering, department stores and other industries that will benefit from the new tariffs and subsidize more profits, even in the bank card industry, competition is growing.

The contraction of the "comfort zone" may be the one that kicks the new profit engine.

Card issuer: Chess shop to "big retail"

From the statement of the NDRC and the central bank's answer to the reporter's question, the issuer's overall face is lowering the card processing fee. The new rate is: the debit card does not exceed 0.35% of the transaction amount and the single cap is 13 yuan, the credit card does not exceed 0.45%; the issuing bank's previous income is 70% of the total handling fee, and the original rate is based on the merchant category. Sub-files, such as: 1.25% for food and beverage, 0.78% for department stores, 0.38% for supermarkets, and single-caps for wholesale and livelihoods.

For example, in the case of the most obvious catering business, the original credit card holder swiped 100 yuan, the restaurant paid 1.25 yuan, and the issuing bank obtained 0.875 yuan, but the new card issuing bank got the highest 0.45 yuan.

"From the point of view of the card processing fee alone, it is a challenge for us with a large number of banks." A bank card management team said in an interview. However, he further turned around and said that since the last time, that is, the rate reduction in 2013, most banks in the industry have accepted the fee to enter the “low profit era”, and adjusted the income structure, expanded the installment and revolving interest income, and cashed in. The proportion of fees (including income from intermediary business) and interest income.

The newspaper learned from relevant persons in the banking industry that after several years of adjustment, most banks have successfully reduced the fee income from card issuance and receipt to less than 20% of the card center's overall revenue, or even lower. . As a result, even if the new tariff rules have a certain impact, the overall situation is not serious.

As for the income of the issuing bank, it will be difficult to make accurate estimates. On the whole, an industry observer said to the newspaper that assuming that the 7.4 billion is calculated by the National Development and Reform Commission, the UnionPay estimates that it will digest "a few hundred million", and the fee income has historically been seven times that of the UnionPay issuer." Will eat a large part of the large plate"; from the individual card issuer asked by this newspaper, the situation is relatively large.

Interestingly, a card issuer ranks among the top shareholders of a joint-stock bank. One of its management personnel told this newspaper that according to their estimates, the actual impact of the new tariff rate on the bank’s fee income is limited, and even ". The reason is that the new regulations canceled the fee capping mechanism for credit card swiping in wholesale merchants (only a two-year preferential rate transition period for some people's livelihoods), and at the same time smoothed the price of different types of merchants, which was originally eroded. The problem of credit card cashing and MCC set-up for the profit of the issuing bank has been greatly alleviated.

It is necessary to mention that the original credit card credit line relies on the wholesale merchant POS capping machine to take interest-free funds, which not only occupies the bank card center to use the internal FTP pricing to cost the funds from the head office, but also hides With the high risk of bad debts, in addition to the bank card centers that need to be scaled up in particular, the average bank regards this as a big burden. The new rules can reduce the burden on banks at this point.

It is said that in the past, during the most “squeaky” period of card lottery, some card-issuing credit card wholesale merchants accounted for half of the transactions, and it was only suppressed in the past two years. This caused the average credit card processing fee rate of some card-issuing banks. After the reduction of the New Deal, the rates are close to or equal, and some of the livelihood merchants that still have preferential treatment are deducted, and the total is also in the early 0.4%. From the point of view of the reduction of the rate standard, in the words of the above-mentioned "banks with large card issuance" card department, the impact of the New Deal is "in fact, it is okay". In the past, the card issuers with a high proportion of wholesale credit cards may be strengthened by market regulations. "Benefit."

A person with a small number of banks issued a bank even said that "welcome this adjustment": First, anyway, their stocks are not much affected. Secondly, he said that in the long run, the burden on merchants will be reduced and the payment environment will be better. The increase in the use of bank cards to pay for merchants has also increased the number of cardholders who are willing to spend on bank cards. The total number of cards used for credit card consumption is large, that is, the market for them to develop by chance is large.

The small pattern of jumping out of the fee, a review by Dong Xiwei, a visiting researcher at the Chongyang Financial Research Institute of Renmin University of China, is close to the view of the above-mentioned big card department: from the perspective of the overall business of bank cards, large retail and even the overall business of the bank.

"When the handling fee is high, it can be used for extensive farming, and it is easy to collect the handling fee. Now that the handling fee is not well received, it is necessary to intensively work hard, and force the issuing bank to carry out product innovation and service innovation." Dong Xizhen said in an interview with this newspaper. "Banks will be able to provide a variety of financial services, such as credit card installment, payroll, merchant financing, etc., for large merchants can also carry out 'public-private linkage' marketing, get more in the card processing fee' "Thin-profit income", to enhance the efficiency of the large retail business and even the company's business."

Yang Tao, assistant to the director of the Institute of Finance of the Chinese Academy of Social Sciences, compared the bank card fee with the Internet speed-up and fee reduction. He said that the sharp decline in the cost of Internet traffic has promoted the activity of mobile phone hardware production and sales, APP applications, O2O and Internet financial services, and improved the overall innovation capability, scale and quality of the industry; the same is true for bank card fees and fees, and merchants’ needs are also In the event of change, what is needed is a set of integrated integrated services, rather than a single acceptance of bank card business. The market is pushing banks to accelerate innovation and provide integrated financial services.

Liquidation organization: Where is the transfer fee "cutting meat"?

Compared with commercial banks with more business models and richer revenue structures, UnionPay, as a bank card clearing organization, may be more painful by the new rate policy. The president of China UnionPay, Shi Wenchao, revealed in his 2015 New Year speech that the clearing service that UnionPay is engaged in is a “small profit industry” with a profit of less than 2 billion. Therefore, regardless of the final UnionPay to take away from the big plate of the decline, "the billions of dollars", this new policy means "cutting the meat."

In the original credit card fee standard, UnionPay, which is the transfer clearing party, can charge 10% of the total handling fee, but the new regulations will reduce this to not exceed 0.065% of the transaction amount and capped 6.5 yuan, which will be issued by the issuing and receiving institutions. Take half.

For example, the most obvious food and beverage merchants in the down-conversion are the original credit card holders who swiped 100 yuan, the restaurant to pay 1.25 yuan, and the liquidation organization obtained 0.125 yuan, but the clearing organization in the new regulations received 0.065 yuan.

Different from the significant adjustment of the income structure of the bank card department, the transfer settlement fee income still accounts for more than 90% of the UnionPay share. For this heavy punch, UnionPay and the institutions that will enter the offline clearing market in the future will all be difficult to avoid.

The newspaper found that the pricing mechanism of major overseas markets found that the US card processing fee rate was 2% to 3%, the average handling fee for Japanese merchants accepting credit cards was 2% to 3%, and the debit card was 1.5% to 2%. The average level is 2.3%, Germany is 0.7% to 2.6%, and Poland is 2% to 2.4%. It is not difficult to find that the “low” level of handling fees in the country has already been at the forefront. "In the future, international card organizations will enter the territory to carry out transit clearing services. Such low rates will lead to their collective 'consistency'," said Zhang Kuanhai, a professor at Southwestern University of Finance and Economics, at an internal seminar.

An overseas card organizer who did not want to be named said to the newspaper that there are new rules on rates in Australia and the United States, but the final ruling takes into account the necessary costs of banks and card organizations, not the lower The better, the card organization has to provide a series of services such as network, host, data and other infrastructure and product innovation and security, all at a cost. He also said that the bank card industry will certainly be open and inclusive, and multiple entities will complete interest coordination among them.

However, in addition to transferring clearing income, offshore card organizations have other sources of income. Our reporter inquired about one of the giant's MasterCard 2015 financial report data, found that in its total revenue of 13.5 billion US dollars, the transaction processing fee (essentially equivalent to the domestically known transfer settlement fee) is only 4.3 billion US dollars, and the other The big head is the brand management fee (authorization fee) of 4 billion US dollars, in addition to cross-border transaction costs of 3.2 billion US dollars and other income of 1.9 billion US dollars.

According to the above-mentioned industry observers, the income composition of many international card organizations includes transfer settlement fees, brand management fees, value-added service fees, etc., and the proportion of brand management fees is equal to or exceeds the transfer clearing fee. A healthier income structure. The core assets of the card organization are actually the brand, which is the logic behind the names of the major card brands rushing for well-known events. But for UnionPay, the "franchise" over the years has made it impossible to actually operate as a card organization, and more than just a transfer clearing organization. In the face of various quasi-clearing platforms, the status quo of UnionPay brand cards is transferred without authorization, and often “has a hard time”.

"There is still saying that we enjoy the 'monopoly' blessing, but in fact, in many respects, we do not enjoy the 'marketization' blessing." Once a UnionPay person expressed to the reporter.

However, it is worth mentioning that, in this regard, the market has also begun to speculate that in the future, online payment of unified clearing platform network dust will gradually become timed, perhaps the brand management fee of the domestic card organization will also be put on the agenda. After all, when the market is open and the Chinese and foreign card organizations compete on the same stage, the differentiated rule orientation will cause the regulatory authority to be questioned.

What else can UnionPay have to rely on? Judging from the income structure of MasterCard, Chang Qing, the president of China, was informed that MasterCard also provided value-added services such as big data and business consulting to various partners, and increased investment and innovation in high-tech and digitalization. Gain greater service capacity and more sources of income.

In terms of innovative business, UnionPay has actually begun to take action. In addition to the continuous development of the mobile payment platform “Cloud Flash Pay” promoted at the end of last year, its planning for the “UnionPay Wallet” to build an O2O integrated service platform is also one of the trends. In addition, UnionPay International has developed in a low-key but rapid manner in recent years and has become a new profit engine for China UnionPay.

Acquiring agency: the game is inevitable

In the part of the acquisition that has been fully competitive, the rate pricing in the new regulations has also been thrown into the market: the specific rate is determined by the acquiring institution and the merchants themselves. Between the various market players, between the scale and the profit, a game is inevitable.

At the beginning of the new rules, what is the pricing strategy of each acquirer? For this market secret, all institutions are indifferent. Individual institutions that are willing to speak, such as quick money, only indicate that there is no specific response to the rate adjustment, and a wide range is included for the handling fee.

But when reporters turned to these institutions to speculate on how their peers would respond, a third-party acquirer believes that several institutions in the industry that are still "staking a horse" are likely to take the opportunity to "low-cost dumping." "They want the market to possess, and it's impossible to 'go in and out'."

Competition is a double-edged sword. Optimists see it's improvement in the customer experience, and pessimists are afraid of price wars and the possibility of triggering industry reshuffles.

Wang Weiguo, president of the Bank of China (3.450, 0.00, 0.00%) Law Research Institute and professor of China University of Political Science and Law, said at an internal seminar that after the formation of new prices, there will be competition between acquirers and merchants will have a choice. The game results of space, competition and choice will make acquirers tend to lower rates, improve service and improve user experience.

But there are also third-party acquirers that can't afford to play. In the face of the profit challenge, many acquirers said to the newspaper that the profit challenge will be more severe. They can only find ways to diversify their operations and gradually get rid of the dependence on the collection service fee.

A card organizer who docked the relevant institutions once mentioned his observations to this newspaper. From the perspective of third-party payment, the top few in the industry and the ambitions of the impact capital market, for them, for the industry The "halo" of the leader, even if the scale of not making money, must first be squatted. Because the possession of the market itself leads to the accumulation of "big data" and the manufacture of concepts, the favor of the capital side, and the possibility of an unlimited imagination of Internet finance.

However, the existence of these institutions is likely to be an expulsion of similar price wars for the industry.

In fact, before the introduction of the new tariff rules, the share competition in the acquiring industry has become “white-hot”, and even the banking receipts have been marginalized by the third-party payment institutions. According to the internal data of the licensed credit card center in Shanghai in the third quarter of last year, the proportion of third-party payment companies' receipts has reached 50.89%, a rapid increase of 13.67 percentage points year-on-year, surpassing the bank for the first time.

However, banks that are still doing the acquiring business also have their own tricks.

A joint-stock bank card center with the characteristics of traditional credit card business told this newspaper that they intend to take the “high-end merchants” route based on the advantages of brand and service for the acquisition of the new rules after the implementation of the new tariff rules. Merchants will no longer be their target audience.

In addition, a number of acquiring bank people also mentioned that the acquiring service is already meager in terms of revenue, but this business is still necessary, on the one hand, a service package when serving customers, and more importantly On the one hand, it acquires the flow of merchants through the receipt, thereby providing the basis for the loan review for subsequent loan products (such as “flowing loans”), or obtaining important data of the merchants to provide support for the bank's big data development.