3 Nov 2016
UnionPay Limits Hong Kong Insurance Purchases
In the wake of unconfirmed reports that mainlanders will no longer be able to pay insurance premiums in Hong Kong with UnionPay cards, UnionPay International announced (on 29 October) a set of guidelines to clarify the relevant issues.
UnionPay International said it has noticed the recent surge in multiple transactions made by the same UnionPay card with the same merchant, a phenomenon particularly obvious with some of the overseas insurance merchants. UnionPay has therefore released the Compliance Guidelines for Overseas Insurance Merchants Accepting UnionPay Cards Issued in Mainland China in a bid to further regulate the practice of overseas insurance merchants with regard to the acceptance of mainland-issued UnionPay cards. The guidelines stipulate that UnionPay cards issued to mainlanders cannot be used to buy insurance products overseas, except for travel-related insurance transactions which are considered current transfers.
The guidelines are being implemented in Hong Kong on a trial basis and applicable to overseas insurance merchants that accept mainland-issued UnionPay cards via various channels, such as POS terminals, online and mobile payment platforms. The salient points of the guidelines are as follows:
1. Mainland residents are not allowed to buy any insurance products with UnionPay cards overseas, except for travel-related insurance (such as accident and illness) premiums which constitute current transfers,
2. China’s foreign exchange policy provides that any single transaction conducted with an overseas insurance merchant must not exceed the limit of US$5,000 or the equivalent in another currency. Such provision should be strictly enforced.
3. Card acquirers outside the mainland are required to step up supervisory efforts with regard to insurance merchants. Measures include the accurate assignment of merchant category codes, the provision of additional training for merchants, closer monitoring on abnormal transactions and inspection of merchants’ activities, etc.