People’s Bank of China (PBOC) on Monday published details regarding regulations of the booming online payments sector, which are set to come into effect on July 1, 2016.
The new rules restrict the size of payments done from non-bank payment accounts and introduce certain requirements for registration.
In particular, the size of payments through such accounts will be limited from CNY 1,000 to CNY 200,000 per year. The accounts are ranked in three categories according to security levels. Also, the rules envisage a requirement for a real-name registration for all non-bank payment accounts.
The new rules will not apply to payments through banking platforms.
According to a report from Xinhua, the goal of the new rules is to help 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 exposed to possible risks. Xinhua also mentions a string of fraud cases over the past years underlining the serious risks in the sector.
The recent growth of China’s third-party payment industry has been remarkable. One example is the success of Alipay, the service of Alibaba Group Holding Ltd (NYSE:BABA). Xinhua quotes estimates showing that in the first three quarters of 2015, payment institutions’ online transaction volume totalled 32.97 trillion yuan, up 98.8% from the equivalent period a year earlier.
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