What’s new: China’s central bank is collecting public comments for a set of guidelines governing the country’s 185 nonbank payment providers including Alipay and WeChat Pay, offering a five-year window for institutions to comply.
The People’s Bank of China Monday issued the draft guidelines, spelling out implementation details of the new industry regulations approved by the State Council late last year and due to take effect on May 1.
The guidelines specify requirements of the regulations, clarify issues of concern in the industry and detail measures for complying with the new rules.
According to the draft guidelines, institutions will have up to five years to comply depending on their business license, and the regulations will not affect business activities that have already been licensed.
The background: The State Council, China’s cabinet, in December approved new regulations on the supervision and administration of nonbank payment institutions (非银行支付机构监督管理条例), which replaced a 2020 document as the overarching rules for the industry.
The new regulations seek to put China’s booming nonbank payment industry under close oversight and standardized supervision, setting requirements on various aspects of nonbank payment operations, including market access, domestic and cross-border services, controlling shareholder qualifications and user protections.
Without detailed guidelines, concerns were mounting among the industry over issues such as the transition period and how institutions’ business might be affected.
By the end of 2023, there were 185 licensed non-bank payment institutions in China. They handled more than 10 trillion transactions amounting to nearly 40 trillion yuan ($5.5 trillion) in 2023, serving over 1 billion individuals and tens of millions of merchants.
Contact reporter Han Wei (weihan@caixn.com)
