University of Macau Professor Davis Fong Ka Chio says the mandatory requesting of Chinese-issued Union Pay (CUP) cardholders to verify identification will not pose significant impact on Macau’s economy, not even the city’s gaming industry.
The verification system – titled ‘Know Your Customer’ (KYC) – requires cardholders to provide proof of their Chinese Resident ID card status and subjects them to face recognition.
Professor Fong noted that the withdrawal limits of Mainland Chinese-issued bank cards from local ATMs to MOP/HKD5,000 per transaction (US$621) in December last year did not affect the gaming sector much, thus he believes that the extra procedures for withdrawing cash from ATMs will not result in a negative impact.
“The amount [that can be withdrawn] is more important than the face recognition system,” opined the professor. “[if not having enough cash] they could also use card payment […] as well as third party payment methods.”
He said that the new restriction will effectively prevent the use of other people’s cards which is considered illegal behaviour, while stressing that it will not affect consumers who spend legally.
The professor is, in fact, more concerned about whether the ATMs would run properly.
Business Daily recently withdrew cash using a CUP card, with the transaction successfully completed in less than five minutes.
With the suspension of cash withdrawals for ATMs unequipped with the KYC system, Fong agreed that this current stage would pose an inconvenience to tourists, but opined that the issue would only be confined to the technical field.
When asked if the cash withdrawal limits would affect the VIP gaming sector, the professor said non-negotiable chips would normally be used for gambling, with the value of these chips being more than MOP10,000 and as such would not affect the sector at all.
Regarding the mass market sector, Professor Fong cited from his previous studies that the medium outlay on mass market gambling is around MOP5,000 with the average some MOP15,000, which in the majority of cases would only affect spontaneous gamblers.
“Spontaneous gamblers are tourists who only want to gamble when they enter the city and so are most likely to obtain cash from ATMs,” explained Fong. “In the event of less convenience, the number of these spontaneous gamblers would be fewer.”
Overall, Fong believed that tourists would get used to the new measures after a few months.
Less complex ways
Economist Albano Martins, meanwhile, said the government should invent other simpler ways to combat money laundering.
“I believe the quantity of money that will be taken out from ATMs will be less,” he remarked, while adding that the situation is difficult unless the authorities impose other ways requiring less complicated procedures.
“For now, this is the only way to combat money laundering,” said Mr. Martins. “But my experience is every time the Chinese community will invent a way to escape and this will continue.”
He indicated that the new implementation would impact the gaming industry because “UnionPay cards are widely used to escape the authorities”.
Despite the new procedure requested for cash withdrawals spending less than five minutes, Mr. Martins said it is still a fact that it now takes longer to withdraw cash than previously.
“Because it takes longer to get money less money is taken from the machines and thus less money is used in the market,” commented the economist.
Meanwhile, in response to Business Daily enquiries, the Gaming Inspection and
Co-ordination Bureau (DICJ) replied that the Bureau ‘so far has not seen any negative impact on the gaming industry after the introduction of the KYC system in ATMs’, adding that it ‘welcomes any measures that will enhance the promotion of betterment, integrity and quality in Macau’s gaming industry.’