Rogue UnionPay transactions could amount to MOP50b

Rogue transactions using unregistered China UnionPay handheld terminals in the region have amounted to around MOP5 billion for 2016, marking a five-fold increase compared to last year.

A gaming industry insider suggested that the actual amount was likely to be higher.

“That MOP5 billion is almost certainly the tip of a very big iceberg. At an educated guess, I would put the actual figure at 10 times that amount […] closer to MOP50 billion. Almost MOP1 billion a week for 2016,” the insider said, as cited in a report by South China Morning Post.

The detected amount was the result of 25 police investigations. Yet only 20 cases were handed over to the Public Prosecutors Office, as the other five cases were said to have gathered insufficient evidence from investigations.

Although the Judiciary Police did not reveal how many illegally modified hand-held terminals were seized, authorities said they identified 53 suspects as part of their investigations, the majority of which are from the mainland.

These Point of Sale (POS) devices can allegedly be tampered with so as to have UnionPay identify them as being registered and operated in the mainland, where transaction fees are much lower.

Such operations are considered illegal as transactions are made in the territory through POS machines of China’s Union Pay or others provided by third parties.

“In recent years, several pawnshops and jewelry shops here have used the [modified] mainland Chinese UnionPay POS units to offer clients access to cash withdrawal services with the aim of lowering their own operation costs and enhancing profits,” the Judiciary Police told website GGRAsia.

Authorities suggested that the money withdrawn was used for gambling purposes.

As mainland tourists in Macau are only allowed a daily limit of RMB20,000 in cash when crossing the border, they allegedly dodged this restriction by purchasing high-priced items using their UnionPay cards.

These items would immediately be returned in exchange for cash.