The government said Monday it will lower bank card charges for businesses ranging from retailers to property developers in order to reduce their burdens and boost consumption.
The move will take effect on Feb. 25 as part of government efforts to bring distribution costs down and expand domestic demand, according to a statement issued by the National Development and Reform Commission (NDRC), the country’s top economic planner.
The cuts will save Chinese businesses about 4 billion yuan (637 million U.S. dollars) a year, an NDRC official said.
Under the new charging scheme, service fees paid by catering enterprises to banks for card transactions will go down by 35.7 percent, while those paid by department stores and supermarkets will decrease 21.4 percent and 25.7 percent, respectively, said the official, who declined to be identified.
Service fees charged by card payment network operators for catering businesses will drop 35 percent and those for department stores and supermarkets will both fall 20 percent, the official said.
Other types of businesses that will benefit from the policy include hotels, jewelry shops, property developers, automobile merchandisers, tourist agencies and gas stations.
Bank service fees for restaurants will be collected at a standard rate of 0.9 percent after the adjustment and the rate for payment network service fees will stand at 0.13 percent, the NDRC said in the statement.
Card transactions that take place at public hospitals and public schools will be exempt from bank and payment network service fees, according to the statement.
Individual consumers will also benefit from the move, as high card charges for businesses are sometimes passed on to buyers in the form of higher product prices, the NDRC official said.
The Chinese government is eyeing domestic consumption as a major economic driver, as softer external demand and property investment have dragged down the country’s growth.
Retail sales, a key indicator of consumer spending, rose 15.2 percent from a year earlier in December and was up from 14.9 percent in November, according to the latest official data.