After the dual-standard card is converted to a single-standard card, what changes have occurred in outbound travel consumption and repayment?

　　Author: Qi Ning

　　With the adjustment of the epidemic policy, many countries around the world have relaxed the entry restrictions on Chinese tourists, and more and more people are being moved by outbound travel. Qiu Ya and his wife, who planned to go abroad for their honeymoon three years ago, are planning a long-lost trip to Europe and the United States. .

　　However, a piece of information from China Merchants Bank’s credit card center recently made Qiuya confused. The general idea is: starting from March 1, the American Express dual-standard card (AE+UnionPay) will stop issuing, and the existing cards will be suspended after expiration. Reissue The new card (AE single-label card) will be kept in RMB and repaid in RMB, and the 1.5% foreign currency exchange fee will be exempted.

Shanghai Pudong Development Bank also stated that some American Express single-label foreign currency cards will be converted into American Express single-label RMB cards.

　　What does it mean to convert a dual-standard card to a single-standard card?

Will it affect the use?

Do I need to bring two credit cards when I go abroad in the future?

In addition to American Express, are there any similar changes for Visa (Visa) and Mastercard (MasterCard)?

With the upgrade and replacement of some banks' outbound credit cards, these doubts have plagued many Chinese "prospective tourists" like Qiu Ya who plan to travel abroad.

　　A reporter from China Business News learned from a number of banks that in recent years, with the gradual opening up of my country's payment and clearing market and further regulation of regulation, it has become a trend to switch from dual-standard cards to single-standard cards, and to replace magnetic stripe cards with chip cards.

Although some banks still support magnetic stripe/magnetic stripe + chip dual-label cards, the "two-in-one" chip single-label card is more recommended, and many card types are exempt from foreign currency exchange fees.

　　For Qiuya, if only the payment function is considered, there are still many choices of credit cards for outbound consumption. It mainly depends on the local coverage of each card organization (clearing institution), so there is no need to get too entangled.

Suspended card, card replacement, what changes?

　　As early as January 11 this year, the China Merchants Bank Credit Card Center issued a notice stating that the bank will stop the American Express gold card (AE, UnionPay dual-standard card) and green card (AE, UnionPay dual-standard card) from March 1, 2023 (inclusive). Dual-standard card) application acceptance and issuance, the existing card can still be used normally before the expiration date.

　　In the past, the American Express Gold Card/Green Card held by Qiu Ya had both the UnionPay logo and the American Express logo, and could accept domestic and foreign transactions. USD settlement is supported, and a foreign currency exchange fee of 1.5%[1] is often charged for non-USD foreign currency transactions.

　　This model is similar to the dual-standard cards issued by Visa, Mastercard and other international card organizations in China and cooperative banks. It is an important payment tool for domestic consumption and outbound travel.

So what are the changes in the new AE single-label card, and what does it mean for cardholders?

　　"(American Express) Centurion Credit Card Gold Card, the annual fee is 300 RMB per card, the Centurion Credit Card Green Card, the annual fee is 100 RMB per card, the first-year annual fee is waived for customers who successfully apply, and they can use it 6 times within a year , you can enjoy the annual fee reduction for the next year.” The reporter learned from China Merchants Bank and American Express that the new American Express single-standard card has the same annual fee as the previous double-standard card. In addition to higher security, the biggest difference is that on the one hand, domestic It no longer supports offline UnionPay POS machine transactions, but you can use the Express channel; on the other hand, the 1.5% exchange fee will no longer be charged for non-US dollar currencies when purchasing overseas.

　　Regarding the foreign currency transaction "RMB bookkeeping and RMB repayment" mentioned in the notice of China Merchants Bank, the reporter found out from a number of card issuing banks including China Merchants Bank that before the Amex dual-standard card was converted to a single-standard card (RMB), many Dual-label cards and foreign currency single-label cards have already achieved this function.

　　Take China Merchants Bank's "AE+UnionPay" dual-standard card that has been discontinued as an example. Depending on the customer's credit card line and whether the "request for foreign exchange" function is activated, the card may issue a US dollar bill or a RMB bill for overseas transactions.

The so-called "purchasing foreign exchange upon request" is the function of "accounting for foreign currency consumption in RMB". After the cardholder chooses to activate this function, any foreign currency transaction will be automatically purchased and credited in RMB, and finally only need to return the RMB according to the RMB bill That’s it; if this function is not activated, the account will be credited in US dollars, and the cardholder needs to repay directly in US dollars or currency exchange after the expiration date, and a foreign currency exchange fee will be charged for non-US dollar transactions.

　　A slight change at present is that, compared with the previous dual-standard card holders, they can independently choose whether to activate the above-mentioned functions, so as to decide whether to manually purchase foreign exchange and repay the repayment in the end. The function defaults to the built-in function, and the user cannot choose to close it.

This also means that cardholders who have pre-deposited enough U.S. dollars in their U.S. dollar accounts will not be able to directly deduct U.S. dollars when spending overseas as before; nor can they pre-deposit U.S. dollars in advance for consumption or repayment.

The general trend of converting dual-standard cards to single-standard cards

　　As notified by China Merchants Bank, this time the American Express card (dual-standard card) has been deactivated and forwarded to the new card, mainly due to the business adjustment of American Express.

As early as June 2020, Connect (Hangzhou) Technology Service Co., Ltd. (hereinafter referred to as "Connect"), a subsidiary of American Express, obtained a bank card clearing business license issued by the central bank. This is the second bank card in China after China UnionPay. The liquidation license is also the first bank card liquidation license granted to a joint venture in my country.

　　Tongtong Company is a bank card clearing institution jointly established by American Express and Lianlian Payment. After obtaining the clearing license, its bank card clearing network can handle online and offline payment transactions of American Express brand bank cards in China, and can support domestic mainstream Card-binding transactions on mobile payment platforms.

This also means that the dual-standard/foreign currency single-label credit cards issued by American Express authorized by banks in China will be converted into RMB single-label credit cards, the card brand will still be American Express, and the clearing channel will become a connected company.

　　Recently, Shanghai Pudong Development Bank also issued a notice on adjusting the American Express credit card on January 5. ), Shanghai Pudong Development Bank American Express Xingui Credit Card (foreign currency card), and Shanghai Pudong Development Bank American Express Magic J Credit Card (foreign currency card) will be suspended from February 20, and the stock card will be updated to the RMB version when it expires or reissues a new card.

　　According to the reporter's understanding, most Chinese-funded cooperative banks, including Industrial and Commercial Bank of China, Agricultural Bank of China, and China Construction Bank, have updated the American Express card to a single-label RMB card, and the existing Amex dual-standard cards/single-standard foreign currency cards may gradually Withdrawal, but for the specific suspension time of such dual-standard cards, the time of each cooperative bank is different.

For example, Shanghai Pudong Development Bank has already suspended the issuance of American Express single-label foreign currency cards in 2021; the newly launched American Express Yaohong Card and American Express Clear Card by Industrial and Commercial Bank of China are both RMB single-label cards.

Connectivity also revealed to reporters that after obtaining the bank card clearing business license in June 2020 and holding the license to expand its business in August of the same year, Connectivity has cooperated with 22 mainstream card-issuing banks in China to launch nearly 100 American Express brand RMB credit cards and debit cards. credit card products.

　　In fact, dual-standard cards have their own particularities in China. Compared with the internationally accepted "one card, one standard", when my country's bank card clearing market has not yet been opened, it needs to pass through UnionPay's RMB settlement network in China and overseas. The foreign currency settlement is carried out through the settlement network of the international card organization designated by the dual-standard card logo, and the "China UnionPay + overseas card organization" dual-logo credit card came into being, and it has been 14 years so far.

As early as 2015, the State Council issued the "Decision on Implementing the Access Management of Bank Card Clearing Institutions" to increase the access threshold of overseas card organizations; in 2016, the central bank held a meeting on the issuance management of foreign currency single-standard cards and dual-standard cards , decided to suspend the issuance of dual-standard cards, and the existing dual-standard cards will be converted to single-standard cards after expiration.

Since UnionPay’s overseas coverage of merchants is far less than that of overseas card organizations, the most discussed at the time was that you may need to bring two cards when you go abroad in the future—one UnionPay credit card (RMB) and one Visa/Mastercard/Express credit card (foreign currency).

Many Chinese consumers also consider the local coverage and handling fees of international card organizations when they go abroad.

　　But the question now is, after the Amex dual-standard card is converted to single-standard, do consumers need to apply for a separate UnionPay card for domestic or overseas RMB consumption?

One of the main changes of the American Express card that has been converted to a single-label card is that it no longer supports offline UnionPay POS machine transactions after it "leaves" from UnionPay. It still has the "Online UnionPay" function; for some merchants that support the clearing channel of American Express, they can also directly swipe (insert) the card for consumption.

　　After obtaining the liquidation license, Connect Company supports card-binding transactions on 6 mainstream mobile payment platforms in China.

Specifically, China Merchants Bank American Express Centurion Gold/Green Card can not only be used for shopping on Haitao website like other foreign currency single-label cards, but also through binding Alipay, WeChat Pay, JD.com, Meituan Express Trading Channel, and China Merchants Bank Handy Life and UnionPay Cloud QuickPass App, for online consumption in China, as well as scan code payment and cash register payment.

This is also the difference between the American Express RMB single-label card and the foreign currency single-label card of other international card organizations in China.

　　Following Connect, in February 2020, Wanshiwanglian Information Technology (Beijing) Co., Ltd., jointly established by MasterCard and Wanglian, was approved for establishment.

This means that the second Sino-foreign joint venture bank card clearing institution is approved to prepare, and the Chinese bank card clearing market is gradually opening up.

Magnetic stripe card to chip card is more secure

　　In the process of replacing old and new, Visa, Mastercard and some cooperative banks, which have a wider global network and a larger customer base, have provided more humane solutions.

Taking Industrial and Commercial Bank of China as an example, according to the reporter's understanding, the bank is currently promoting the "two cards in one set" model, that is, issuing UnionPay RMB single-standard card + Visa/Mastercard foreign currency card (can support 10 kinds of foreign currency settlement), and the validity period (8 years) ), which is longer than the 5-year-based dual-standard card.

　　In addition, Shanghai Pudong Development Bank, Agricultural Bank of China, China Construction Bank and most other banks’ existing dual-standard cards other than Amex will not be affected, and new dual-standard card applications are still supported, mainly UnionPay+Visa or UnionPay+Mastercard, UnionPay+JCB.

However, whether it is a dual-standard card or a foreign currency single-standard card, it is generally the same as the upgraded American Express card, and many cards have exempted foreign currency exchange fees.

　　Take the above-mentioned ICBC single-label card combination as an example, the official introduction of the foreign currency single-label card states that when using the corresponding channel (Visa/Mastercard, etc.) in the country or region that supports the corresponding currency, the account will be directly credited in the corresponding currency without currency conversion , cardholders do not need to pay foreign exchange fees.

But the customer service staff emphasized that as long as the card type supports global payment (that is, supports multiple foreign currency accounts) automatic exchange function, it is very convenient to actually enter the account in RMB and repay in RMB.

When the original consumption currency is not within the settlement range supported by the credit card, it will be automatically converted into US dollars and recorded in the account, and the foreign currency exchange fee will be exempted.

　　With the gradual opening up of China's payment and clearing market, it will be the general trend to switch from dual-standard cards to single-standard cards.

At the same time, based on security considerations, the transfer of magnetic stripe to chip cards is also advancing in an orderly manner.

A customer service staff at the ICBC credit card center said that the bank basically does not have dual-standard cards at present, and it is not recommended to apply for dual-standard cards again.

On the other hand, because dual-label cards are mainly magnetic stripe cards and magnetic stripe + IC chips, they are not as secure as chip cards.

　　At present, the outbound travel credit cards that Qiuya can choose on the market mainly include Visa, Mastercard, and JCB’s foreign currency single-label cards, as well as UnionPay’s dual-label cards, as well as UnionPay and American Express’ RMB single-label cards.

Among them, only the American Express RMB single-label card can be used domestically (or offline) by binding a third-party payment, and most of the foreign currency single-label cards issued by other international card organizations can only be used overseas.

　　For the Qiuya couple, before applying for a card, they need to consider the coverage of different card organizations in the destination (whether the merchant supports the corresponding channel), the currency supported by the credit card, the foreign currency exchange fee, and the annual fee (often a large sum of money). cost) and other key factors.

Of course, in addition to the payment function, the rights and interests granted to cardholders by different types and grades of credit cards are also a consideration.

　　According to Euromonitor International data, based on the number of transactions in 2021, Visa, UnionPay and Mastercard accounted for 39%, 34% and 24% of the clearing field respectively, with a combined market share of 90%; calculated by transaction amount , UnionPay, Visa, and Mastercard accounted for 45.40%, 24.40%, and 14.00% respectively.

There are no more authoritative statistics on the customer base in the Chinese domestic market.

(Note: Qiu Ya in the text is a pseudonym)