China's Drive to Facilitate Overseas Payments Supports the Development of International Consumption Centers

China's Drive to Facilitate Overseas Payments Supports the Development of International Consumption CentersOn March 26th, the State Council General Office forwarded the Ministry of Commerce's "Several Measures to Support the Cultivation and Construction of International Consumption Center Cities," marking a significant step in China's efforts to facilitate payments for overseas individuals. The notice explicitly proposes the improvement of a multi-layered and diversified payment service system, encouraging more merchants to accept foreign bank cards, and supporting the use of more overseas e-wallets domestically

China's Drive to Facilitate Overseas Payments Supports the Development of International Consumption Centers

On March 26th, the State Council General Office forwarded the Ministry of Commerce's "Several Measures to Support the Cultivation and Construction of International Consumption Center Cities," marking a significant step in China's efforts to facilitate payments for overseas individuals. The notice explicitly proposes the improvement of a multi-layered and diversified payment service system, encouraging more merchants to accept foreign bank cards, and supporting the use of more overseas e-wallets domestically. This initiative aims to further enhance the attractiveness of China's international consumption center cities and stimulate international consumption growth.

In recent years, two payment models, "foreign card, domestic binding" and "foreign wallet, domestic use," have rapidly developed and reached a considerable scale in China. "Foreign card, domestic binding" refers to allowing overseas residents to bind international bank cards like Visa and Mastercard to domestic mainstream payment wallets such as WeChat Pay and Alipay. "Foreign wallet, domestic use" involves cooperation between overseas wallet providers and the China National Payment Clearing Center (CNPC), enabling foreign nationals to use overseas wallet apps for domestic payments. These measures have significantly improved payment convenience for overseas visitors to China, boosting tourism and consumer markets.

During the Spring Festival, the rebound in inbound tourism directly led to a surge in foreign card payment transactions. WeChat Pay data shows that the number of transactions by inbound tourists during the Spring Festival increased by 134% year-on-year, with an even more dramatic increase in spending by foreign tourists on foreign card payment platforms. For example, foreign tourist spending at HeyTea using foreign cards increased by a staggering 359% year-on-year. This fully demonstrates the enormous potential of foreign card payments in promoting overseas consumption.

WeChat Pay comprehensively upgraded its foreign card services in July 2023, providing services to millions of foreign nationals, with transaction volume and value maintaining a consistently high growth trajectory. By December 2024, foreign card payment transactions and amounts reached 7.1 and 5.3 times the July 2023 levels respectively, showcasing strong growth momentum.

Progress in "foreign card, domestic binding" has also been significant. On November 6th, 2024, UnionPay International announced that UnionPay cards issued overseas now fully support binding to Alipay. WeChat Pay also launched this service with the support of Industrial and Commercial Bank of China. These measures further improve the domestic payment system for foreign bank cards, providing more choices for overseas consumers.

Regarding "foreign wallet, domestic use," according to the "Payment Guide in China" released by the People's Bank of China last May, 32 overseas e-wallets are currently available for use at domestic merchants, covering regions including Hong Kong, Macau, Southeast Asia, Japan, South Korea, and Mongolia. The CNPC, as a crucial component of financial infrastructure, will continue to optimize payment services for inbound travelers, providing strong support for overseas payments.

In the future, China will further expand the coverage of "foreign card, domestic binding" and "foreign wallet, domestic use," supporting more mainstream domestic wallets to incorporate "foreign card, binding" functionality and continuously expanding the coverage of countries and regions for "foreign wallet, domestic use." Simultaneously, China will actively promote interconnectivity with overseas financial infrastructures, explore network connections with international bank card organizations, cultivate two main channels for accepting overseas walletsleading payment institutions and mainstream acquiring banksultimately achieving seamless payments for inbound travelers in key regions and scenarios.

Beyond traditional bank card payments, the digital yuan provides overseas visitors with a more convenient payment option. The People's Bank of China's "Digital Yuan Payment Guide for Overseas Visitors" shows that the overseas version of the digital yuan app currently supports account registration and wallet opening using mobile numbers from over 210 countries and regions. A digital yuan wallet can be opened without holding a bank account with the operating institution, and anonymous wallets are convenient and quick to open, requiring no in-person visit to a bank branch or provision of passport information or a domestic bank account. The single transaction limit is 2,000 yuan, and the daily cumulative limit is 5,000 yuan.

Notably, the digital yuan's "pay-as-you-go" functionality greatly facilitates overseas visitors. Pre-loading the wallet is unnecessary; users can directly pay using Visa, Mastercard, and other bank cards, with more international card organizations joining the network. As the digital form of legal tender issued by the People's Bank of China, the digital yuan is exchangeable with physical RMB at a 1:1 ratio and constitutes the legal tender system alongside physical currency; its convenience and security offer a new option for overseas payments.

Some believe that the promotion and application of the digital yuan will significantly boost the internationalization of the RMB. The digital yuan needs not only to be "brought in" but also "sent out." Fu Maozan, CEO of Bank of China (Singapore) Limited, stated that in promoting the internationalization of the RMB, besides improving the financial infrastructure for cross-border RMB use, it's essential to expand overseas RMB usage scenarios and increase the variety of RMB-denominated products, such as digital yuan for international settlements. Hong Kong, as an international financial center, is expected to play a crucial role in this process.

The China Securities Regulatory Commission's reply to a proposal from the Second Session of the Fourteenth National Committee of the Chinese People's Political Consultative Conference also mentions further optimizing and expanding the interconnection between mainland and Hong Kong financial markets, continuously optimizing mechanisms such as Stock Connect, Bond Connect, and mutual recognition of funds, conducting in-depth research and discussion on the possibility of Hong Kong companies listing on the mainland, continuing to optimize the "Cross-border Wealth Management Connect" pilot program, and carrying out a digital yuan pilot program in Hong Kong in an orderly manner based on actual conditions, comprehensively deepening close practical cooperation between the mainland and Hong Kong, and consolidating and enhancing Hong Kong's position as an international financial center.

In conclusion, the Chinese government is actively promoting the facilitation of overseas payments, providing a solid payment infrastructure for the construction of international consumption center cities. By improving a multi-layered and diversified payment service system and continuously enhancing payment efficiency and security, China will better attract international tourists and investors, promote economic development and international cooperation, and further consolidate and enhance its position on the global economic stage.