Core Insights - The issue of cash withdrawal through POS machines has resurfaced due to a reported loophole in the registration process of a payment institution, allowing individuals to register as merchants using false information and engage in credit card cash withdrawal operations [1] - Despite increasing regulatory scrutiny in the payment industry, the prevalence of cash withdrawal through POS machines persists due to the complex web of interests among payment institutions, agents, individual users, and banks [1] - Credit card cash withdrawal violates cardholder agreements and poses significant risks to banks, including potential losses beyond just loan interest, as well as links to organized crime activities such as money laundering and fraud [1] - The ongoing issue disrupts the normal flow of funds and credit systems in the financial market, contributing to instability in China's financial order [1] - Regulatory bodies have introduced various normative documents targeting the flaws in credit card issuance and usage, achieving notable results, but a more effective collaborative governance mechanism is needed to address the root causes of the problem [1] Regulatory Recommendations - Regulatory authorities should enhance their enforcement capabilities against cash withdrawal behaviors by increasing penalties and raising the cost of violations [2] - There is a need for strengthened industry self-discipline, where payment institutions must improve internal control management systems and ensure compliance with entry thresholds and management practices [2] - Banks should actively utilize financial technology to upgrade risk control systems, dynamically monitoring key indicators for abnormal changes to enhance risk management capabilities in credit card operations [2]

Core Viewpoint - The article highlights the issue of credit card cashing out through POS machines, which has evolved from a payment tool for merchants to a means of illegal cash withdrawal for individuals, undermining financial order and regulatory efforts [1][3]. Group 1: Regulatory Actions - In 2025, the People's Bank of China and the National Financial Supervision Administration announced a crackdown on credit card cashing out, requiring financial institutions to enhance transaction monitoring and risk prevention [2]. - Various banks, including ICBC, CCB, and CMB, have stated that cashing out will lead to penalties such as credit limit reductions, account freezes, and potential legal consequences for severe cases [2]. - Regulations such as the "Notice on Further Promoting the Standardized and Healthy Development of Credit Card Business" prohibit the use of credit card funds for loan repayments and investments, mandating banks to strengthen transaction monitoring [2][3]. Group 2: Challenges in Enforcement - Despite numerous regulations and enforcement actions, the phenomenon of credit card cashing out persists, largely due to a complex profit-sharing model that creates a vast network of interests [3]. - Banks have lowered their approval standards and collaborated with payment institutions to offer high cash-out limit products, which diminishes the effectiveness of regulatory oversight [3]. - Merchants often assist individuals in cashing out for a fee, and users are motivated by various incentives, such as avoiding annual fees and accumulating points [3]. Group 3: Recommendations for Improvement - Banks should enhance self-regulation, tighten merchant entry standards, and improve monitoring of credit card transactions to disrupt the profit chain behind cashing out [3][5]. - Regular inspections of small local merchants with unusually high transaction volumes should be conducted, and any suspected cashing out should be reported to relevant authorities [5]. - A long-term perspective should be adopted to prioritize the optimization of the credit card market environment over short-term profit motives [5]. Group 4: Enhanced Monitoring and Collaboration - Utilizing big data and intelligent technologies to build efficient monitoring systems can improve regulatory responsiveness and the identification of cashing out activities [6]. - Financial regulatory bodies should collaborate with law enforcement to ensure strict penalties for serious violations related to credit card cashing out [6].

Core Viewpoint - The article highlights the rampant misuse of POS machines for credit card cash withdrawal in China, facilitated by lax merchant verification processes and the complicity of payment institutions, leading to significant financial risks and regulatory challenges [1][2][3]. Group 1: POS Machine Misuse - Personal users can easily register as merchants using false information, allowing them to convert credit card limits into cash through POS machines [1][2]. - The process of cash withdrawal via POS machines is quick and straightforward, often taking less than 10 minutes to complete [3]. - Payment institutions like Lakala have been criticized for their inadequate merchant verification processes, which enable individuals to misuse POS machines for cash withdrawal [2][3]. Group 2: Profit Motives and Industry Practices - The article describes a profit-driven model where agents earn commissions based on transaction volumes, incentivizing the promotion of POS machines for cash withdrawal [4][5]. - The commission structure is tiered, with higher transaction volumes leading to greater profit margins for agents, creating a competitive environment that encourages misuse [5]. - Payment institutions benefit from increased transaction volumes and associated fees, leading to a conflict of interest in enforcing compliance [6]. Group 3: Regulatory Challenges - Regulatory bodies have issued guidelines to limit POS machine usage to one merchant per device, but these regulations are often circumvented by agents [7]. - The lack of a specific legal framework addressing credit card cash withdrawal leads to low penalties for violators, making enforcement difficult [10]. - The article emphasizes the need for improved collaboration among regulatory agencies to effectively monitor and control the misuse of POS machines [10]. Group 4: Recommendations for Improvement - Experts suggest that payment institutions should enforce stricter merchant verification and transaction monitoring to prevent misuse [10]. - There is a call for clearer legal definitions and penalties related to credit card cash withdrawal to enhance regulatory effectiveness [10]. - Utilizing advanced technologies like big data for transaction monitoring and risk assessment is recommended to combat the issue [10].