Regulators tighten payment safety
Print Edition
COMMERCIAL banks that have business with third-party payment companies will be subject to new rules as authorities aim to enhance payment security.
The banks are required to amend their existing systems and contracts accordingly before the end of June, the China Banking Regulatory Commission and the People’s Bank of China said in a joint notice obtained by Shanghai Daily.
The rules specify both banks and third-party payment firms verify a customer’s identity when the bank account is linked to the third-party payment platform for the first time. Banks should verify a customer’s identity through effective avenues like branches, digital channels, or other direct ways.
For digital channels, a multi-factor authentication is required to prevent an unauthorized person from linking the account to third-party payment service. Banks also have to provide notification in real time on balances of customers’ linked accounts.
The notice also demands that banks review customers’ risk tolerance and adjust the payment limit per transaction per day accordingly. But they should allow a temporary adjustment of the preset limit if the customer requests after proper identity verification.
Alipay, the payment unit of Alibaba Group, and TenPay, the payment unit of Tencent, declined to comment on the impact of the rules on their business with the banks.
Previously, banks required customers to sign agreements to clarify rights and responsibilities before linking their bank accounts to external services.
Major Chinese banks began to lower payment cap in February ahead of the latest rules.
The Industrial and Commercial Bank of China and China Construction Bank have trimmed the payment limit per transaction from 50,000 yuan (US$8,031) to 5,000 yuan.
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