Five secrets of smart credit card cash withdrawal

"Do you want to 'maintain the card' or just 'swipe the card to withdraw cash'?" When the author pretended to have a credit card cash withdrawal demand, Mr. Zhang "professionally" offered two services. If the customer chose the latter, Mr. Zhang's "consulting service" was very good: "It's okay to swipe a large amount occasionally, but if you want to 'use the card to support the card' and withdraw cash for a long time, you can't always swipe a large amount in a single transaction, otherwise the bank will suspend your credit card in a few months."

"I can help you maintain the card. The bank will definitely not find out that you are cashing out." Mr. Zhang vowed.

If you are still at the primary stage of "getting a few cards, finding a merchant (or buying a POS machine) and swiping the cards in turn" when it comes to cashing out credit cards, then you are really out of date. Mr. Zhang - a POS machine agent, a credit card cashing intermediary, and occasionally lending money himself, has become a little famous in the industry. Another POS machine agent once described Mr. Zhang to the author as "being able to provide a complete set of top cashing solutions."

The secret of "top cash out"

Essentially, credit card cash withdrawal is a loan fraud that deceives banks, that is, the credit granted by the bank to the cardholder for consumption is tampered with into cash loans. For this reason, banks generally have a "detection" mechanism: credit cards that are always capped for "consumption" and always "consume" on the same (or several) POS machines will be regarded as cash withdrawal suspects.

If there is a "reconnaissance" mechanism, there is also an "anti-reconnaissance" mechanism. Mr. Zhang's first "simplest but many people can't think of" secret is "no upper limit, no integer swipe". For example, if the credit limit of a credit card is 100,000 yuan, Mr. Zhang may swipe 20,992 yuan once, and then 35,500 yuan a few days later, and 32,120 yuan a few days later. In short, you can't swipe a whole 100,000 yuan on the same day.

Mr. Zhang’s second secret is “simulating normal people’s consumption life”, which he calls his “central idea”; this also includes the third secret “using POS machines of different merchant categories”.

Therefore, in Mr. Zhang's "office" converted from an ordinary house, there are dozens of POS machines. Some of them are "active" and available, and some are "retired" but not yet disposed of by Mr. Zhang. Mr. Zhang said that POS machines have a "cash-out lifespan". If you are lucky, you can use it for several months; if you are unlucky, it can only last for two or three months. That is because there are always cashers who cannot pay back the money they have withdrawn, and the bank will have bad debts. The bank will trace back the business process, and the unlucky POS machine that has swiped a bad debt will be "dead".

What is "simulating normal life consumption"? The cards "kept" by Mr. Zhang will be swiped every morning on the POS machines of the small supermarket MCC (merchant category code) and small restaurant MCC applied by Mr. Zhang. The amount is usually a few to tens of yuan, simulating the behavior of a normal person getting up to buy breakfast and a pack of cigarettes. In the morning, these cards are generally untouched. At noon, the cards will be swiped by the POS machines of the restaurant MCC for tens of yuan. And a few afternoons every week, the cards may be used to make fake purchases of one or two hundred yuan in teahouses and shops.

The MCC of the POS machines in Mr. Zhang's "office" covers various rates, including 0.38%, 0.78%, and 1.25%. In Mr. Zhang's opinion, this not only makes card consumption look "normal" and covers up cash withdrawal, but also allows some cards that are not used for cash withdrawal to accumulate normal points and wait for the bank to "increase the credit limit", and also allows the issuing bank to make some money. Even if the bank finds suspicion, it may not be so decisive to suspend the card.

Someone from a clearing agency once told me that according to their monitoring and analysis, cash withdrawal activities are most common between 14:00 and 20:00. Mr. Zhang's "crime" time coincides with this. After a lot of "cover" card swiping activities, Mr. Zhang usually helps cardholders withdraw cash in the afternoon, choosing some wholesale and real estate MCC POS machines to complete large-amount transactions.

When swiping a card through a POS machine, the funds will generally arrive on "T+1" day, but when providing cash withdrawal, Mr. Zhang's service to those who "swipe the card to withdraw cash" is to redeem the funds on the spot. As for those who "maintain the card", Mr. Zhang generally completes the fund redemption when he receives the credit card. The card remains with Mr. Zhang and he manages the funds circulation on his behalf, swiping and paying back the card every month.

Mr. Zhang's fees vary greatly depending on the amount of cash provided and the level of service. The more "safe" the cash-out method, the higher the "cost" and the higher the fee. For the most basic cash-out, Mr. Zhang charges a fee ranging from 1% to 3%.

Intelligent "anti-reconnaissance" artifact

The most dramatic thing is that Mr. Zhang's "anti-detection" technology has made a leap in recent times. This is his fourth secret: using a card-swiping device that can automatically switch merchant codes, that is, without configuring too many POS machines, it can complete complex "multi-variety consumption" and "fool" banks and clearing institutions. However, this "fully automatic" merchant change is too "extensive" and cannot accurately simulate daily life consumption places.

You can imagine that this POS machine has become a revolver. Every transaction is like firing a bullet, and the data "cylinder" of the background system will be automatically replaced.

Don’t ever think that this kind of “high-tech” is far away from us. Just go to a shopping website and search for the keyword “card maintenance” and you’ll find all kinds of options. If you try it at home and are not satisfied, you can return it for free within 7 days.

A set of official data proves that this phenomenon is becoming common. According to an official internal report "Notice on the Standardization of Bank Card Acceptance Market in the First Half of 2014", a certain acquiring institution had 130,000 and 190,000 merchants frequently changing key transaction information in March and April this year respectively. Of course, this "technology" is not all used for personal credit card cash withdrawal. Most of it is used by real merchants to obtain fake MCC codes in order to reduce card swipe rates.

Pre-authorized cashing out technique to break the credit limit

Suppose a customer has a credit card limit of 10,000 yuan, but wants to withdraw 30,000 yuan to satisfy his desire for excessive consumption, what should he do? Mr. Zhang has his fifth secret: "Pre-authorization cash withdrawal technique".

Specifically, Mr. Zhang used 200,000 yuan of his own funds to make an advance payment and deposited it into the card. He then called the credit card center and requested an increase in the credit limit on the grounds of reasonable consumption. He also used a POS machine with a pre-authorization license to conduct a pre-authorization transaction of 200,000 yuan.

The loophole this method exploits is that, according to relevant regulations, the pre-authorization can be accepted for payment up to 115% of the pre-authorization amount. Therefore, a pre-authorization of 200,000 can be used to pay out a maximum of 230,000, and after deducting the principal of 200,000, the total amount cashed out is 30,000.

However, since the end of last year, a number of pre-authorization cash-out cases have occurred in Zhejiang, Fujian and other places, which have attracted the attention of the central bank and other departments, and a series of payment industry rectification measures have been initiated. Some banks have also become vigilant and have adjusted the maximum completion amount of pre-authorization transactions to 100% in some regions to block arbitrage space.

Reselling POS machines

The reason why Mr. Zhang is willing to teach the author his cash-out secret is simply because he has another way to make money - Mr. Zhang, who is a POS machine agent for a third-party payment company, also acts as an agent for POS machines for those who want to cash out on their own.

According to common sense, individuals cannot apply for POS machines, only self-employed businesses can. However, Mr. Zhang, who has been immersed in the industry for many years, knows how to easily handle this matter by using some fake "three certificates and one form" (business license, tax registration certificate, corporate legal person ID card, merchant information survey form) and photos of storefronts photoshopped with mapping software.

In fact, in the chaotic acquiring industry, Mr. Zhang's skill is not uncommon. If you search shopping websites or online search engines, you will find countless agents who provide fake POS machines. The applicant can even simply provide photos of the front and back of the ID card, the front and back of the bank card, and photos of himself holding the ID card and bank card. After paying, the applicant can receive the POS machine as soon as the next day.

In the middle of this year, Guangzhou police uncovered a major illegal cash-out case involving nearly 400 million yuan, in which a similar plot was involved. 17 POS machines were found at a financial company's crime den, all of which were applied for in the name of different companies and using fake official seals and fake certificates.

Does the bank care?

Illegal cash withdrawal will undoubtedly increase the risk of bank credit card business. According to the data of the central bank, by the end of 2013, the total amount of bad debts of credit cards in my country had reached 25.192 billion yuan, an increase of 10.534 billion yuan from the end of the previous year, an increase of 71.86%. The new bad debts in that year were three times the 3.628 billion yuan in bad debts in 2012. Zhao Xijun, vice dean of the School of Finance and Banking of Renmin University of China, once said that the increase in cash withdrawals of large amounts by exploiting pre-authorization loopholes in credit cards in recent years may cause the amount of bad debts to continue to rise in the future.

This is also a headache for banks. For banks, their credit card risk control is based on the general consumption of cardholders. When cardholders actually convert this credit into a "low-interest working capital loan", the bank's risk management and capital pricing are obviously misaligned.

But do banks really care about this?

In fact, on the one hand, the increasingly "cunning" cash-out methods such as those used by Mr. Zhang have indeed increased the difficulty of "reconnaissance" by banks; on the other hand, there are quite a few cards suspected of cash-out that banks can discover, but not every bank is willing to deal with and suspend the cards in a timely manner.

In the column "The Unknown Things Behind Credit Card Cashing (Part 1)" of "Yu Jian Finance", it is mentioned that banks actually have a game with each other. From the perspective of risk management of cashing, "If we kill them all, they will disappear and the transaction volume will flow into other banks, so we will calculate a balance between risk, capital cost and profit." said a person from the credit card department of a bank.

How does this bank do it? First, "if there is a need to stop, it will be stopped." For example, if the card is suspected of cash withdrawal and is overdue, the bank will stop the card. Second, if the customer is suspected of cash withdrawal, but can still pay back the funds every month, the bank will give a "wholesale limit" that reflects the balance value after considering various costs based on similar situations across the bank, such as 20,000. That is, the customer can only swipe 20,000 yuan at most in a single transaction, otherwise he must call the card center in advance to apply for a limit.

"Even if the customer borrows a large amount from wholesale merchants, we can at least earn 70% of the 0.38% handling fee, which is better than nothing." said the person from the credit card department.

In the recent penalties imposed by the Shanghai Banking Regulatory Bureau on the credit card businesses of seven banks under its jurisdiction, one bank was punished for "discovering that a customer's transaction at a certain merchant triggered the cash-out rules in the monitoring system and there was suspected cash-out behavior, but no effective control measures such as reducing the credit limit or stopping payment were taken for the customer's account."

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.