Non-bank payments subject to scrutiny
Print Edition
China’s central bank released detailed regulations governing online payment services by non-bank institutions yesterday in the latest effort to curb possible risks in the booming Internet finance industry.
The new rules require real-name registration for all non-bank payment accounts and classifies them into three categories depending on the security levels. The size of payments allowed through such accounts will then range from 1,000 yuan (US$154) to 200,000 yuan per year.
Transactions through banking payment platforms would not be restricted by the regulation, the People’s Bank of China said.
The aim of the policy is partly to avoid large sums of money being deposited in third-party payment accounts, which are beyond the protection of bank deposit insurance and will leave consumers vulnerable to possible risks.
Since the creation of Alibaba’s Alipay, China’s third-party payment industry has grown rapidly. In the first three quarters of 2015, payment institutions’ online transactions totaled 32.97 trillion yuan, up 98.8 percent year on year.
With the exception of Alipay and Tencent’s Tenpay, which have made good money selling wealth-management products, most third-party payment models have struggled to find good profit models, with some starting to explore services such as parking money for commodity trading, peer-to-peer lending and crowdfunding platforms.
The new policy will be effective from July 1.
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