Illegal UnionPay transactions in Macau reach $262M in 2016

TAGs: Jasmine Solana, Macau, unionpay

Beijing’s tightened grip on the rampant abuse of UnionPay International’s card system has yet to see any effect in Macau. In fact, authorities are reporting that the number of unauthorized transactions using cards from the mainland China’s bank has almost doubled in the first half of 2016.

Between January and June, the Judiciary Police (PJ) calculated a total of MOP2.1 billion (USD262.5 million) worth of illegal transactions in the territory, Portuguese news agency Lusa reported. The amount is almost double the MOP1.22 billion (USD153 million) calculated for the full year of 2015.

Illegal UnionPay transactions in Macau reach $262M in 2016For the first half of 2016, PJ opened a total of 12 probes into cases involving money transactions using unregistered UnionPay point of sale (POS) terminals. All of the cases were sent to the Public Prosecutions Office for further action, according to the news outlet.

Police have identified 31 people in connection with the investigation—22 of whom were from mainland China. Authorities also seized 22 POS units that they believed have been tampered so that the UnionPay network will identify them as being registered an operated in mainland China, where transactions fees are much lower compared to Macau.

China has been trying to crack down on illicit money channeled through Macau’s casinos for more than a year. In December, the Monetary Authority of Macau (AMCM) started monitoring mainland bank cards on real time to combat “illegal cross-border financial activities and money laundering.”

Pawnshops in Macau are infamous for deriving a huge chunk of their business volume through transactions that disguise cash advances as product purchases. Other scams involve the actual purchase of a high-value item via UnionPay, after which the customer returns the items in exchange for cash.

In 2015, PJ investigated a total of 30 cases related to unauthorized UnionPay use. The transactions were worth an estimated MOP1.22 billion.

China’s UnionPay, on the other hand, have started required holders of China-issued cards to submit a proof of their identity, which will be scanned before their purchase is confirmed. According to a GGRAsia report, the real-time monitoring system was “implemented on high-risk merchants near casinos, most of which are jewelry and watches merchants.”


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