China is urging Visa (NYSE:V) and Mastercard (NYSE:MA) to reduce their bank card transaction fees to encourage spending by foreign visitors, Bloomberg News reported on Friday, citing a source familiar with the matter.
The Payment & Clearing Association of China is proposing to lower the fees on foreign card transactions from the current range of 2% to 3% down to 1.5%, according to the report.
If implemented, this proposal could slash costs for foreign nationals visiting China. While merchants typically bear the fees charged by Visa and Mastercard, these costs are often passed on to customers through higher prices.
Regulators worldwide have been attempting to curb the fees that Visa and Mastercard charge merchants for processing transactions.
Earlier this year, the two companies reached one of the largest settlements in U.S. history aimed at limiting credit and debit card fees. However, a New York judge has indicated she would likely reject the agreement, which would have resolved longstanding litigation in the U.S. over these fees.
Mastercard told Bloomberg it had received the proposal from the Payment & Clearing Association of China and would collaborate with partners to reduce costs for local merchants accepting foreign bank cards.