Beijing is set to launch a nationwide crackdown on rampant abuse of the state-backed China UnionPay card payment system which is said to be "seriously impacting the nation's financial security". An internal memo issued by China UnionPay headquarters yesterday outlines new measures requiring millions of mobile "point of service" (POS) transaction devices across the nation to be properly registered. It is likely to have a significant effect in Macau as insiders say the countrywide crackdown is linked to widespread abuse of the system uncovered in world's biggest casino hub last year. The internal memo - seen by the South China Morning Post - sets out a detailed nationwide audit and warns that sanctions will be imposed by the "relevant authorities" if a raft of new controls are not adhered to. Those authorities are understood to be China's financial regulators and, significantly, the powerful Ministry of Public Security, which has been an important player in identifying problems with China UnionPay in Macau. The crackdown centres on the use of illegal China UnionPay "point of service" devices - debit-card transaction terminals - used by retailers which have been altered to mask cash transactions to circumvent China's strict currency controls. The multi-billion-dollar racket sees customers "purchase" goods, only to return them to the retailer and receive cash, minus the retailer's commission. This is especially the case in Macau, as reported previously by the Post , where devices have been rigged to conduct offshore transactions that actually show up in the mainland's network as domestic transactions. Under the new controls, POS device licensees will have to register all of their existing mobile devices in use, while manufacturers are required to have their devices validated by China UnionPay. This includes hardware and software. Although the tightening by China UnionPay is a nationwide campaign, its effect is expected to be felt hardest in the former Portuguese enclave, where the proliferation of illegal mobile POS devices has been most rampant. It is understood that the Macau government will be under close scrutiny to ensure these measures are strictly carried out by the banks in the SAR. An industry consultant in Macau said the new tightening measures would undoubtedly have a chilling short-term effect on gaming revenues, but could actually be beneficial for the industry in the longer run. "This is clearly a key step towards ensuring a better regulated environment for Macau's gaming industry," he said. "These abuses have been going on for way too long and have to stop."