China to integrate financial functions into social security cards
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Xinhua News Agency, August 30, 2011
China will integrate financial functions into social security cards to provide fast and convenient services for the country's citizens, Hu Xiaoyi, minister of Human Resources and Social Security, said Tuesday.
The multi-purpose social security cards will allow their holders to complete a variety of tasks including withdrawing money from their bank accounts and transferring money between localities like a bank debit card, Hu said at a press conference.
As many as 145 million social security cards have been provided to Chinese citizens as of the end of July, and the number is expected to exceed 190 million by the year's end, he said
The country aims to issue 800 million social security cards by the end of 2015, covering 60 percent of the country's total population, according to the country's 12th Five-Year Plan (2011-2015).
"The issuance of the multi-purpose cards is a key step in promoting the development of the country's social security security program and is also an innovation in the nation's financial services," said Li Dongrong, assistant governor of the People's Bank of China, the country's central bank.
At present, social security cards are mainly used to pay for medical expenses. In the future, services will be expanded to allow social security cardholders to draw pensions and pay for social insurance programs, Hu said.
The country is establishing a network that will allow cardholders to use cards across the country. Currently, they have to go back to their locality of residence to settle accounts, Hu said.
He added that the government will continue to perfect the cards' functions in order to provide better services for cardholders.
When asked about whether national ID cards and social security cards will ever be merged into one card, Hu said the trend is unlikely to appear for the time being, as ID cards are mainly used for social management, while security cards are designed for acquiring public services.
Hu dismissed concerns over possible cases of identity theft that could arise from using the cards.
"A computer chip, rather than a magnetic strip, is embedded into each card, enabling the card to hold more information and making it more secure," he said.
The social security cards will cost between 20 yuan (3.13 U.S. dollars) and 25 yuan in most regions, while those in a special low-income bracket can be exempted from the charge.
Despite the low cost of the cards, Hu suggested cardholders take good care of their cards and not lend them to others.
"After financial functions are embedded into security cards, lending the cards is just like lending your bank cards to others, which is an infringement of your own rights," Hu said.
At first glance, the integration of financial functions into security cards is a method of technical cooperation between the ministry and the central bank, Hu said; however, it will actually benefit hundreds of millions of people in such a highly mobile society, and may even have a profound bearing on the country's development.
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