Chinese central bank People’s Bank of China published draft rules on July 31 which are set to impose more restrictions on third-party payment and accounts, including a 5,000 RMB (US$805.4) daily limit an individual can pay through third-party payment accounts per day.
According to the new rules, third-party payment providers must obtain verifications on users’ identities from several government agencies before setting up accounts for the users. The new rules also allow the governments to impose restrictions on the waiving of transaction fees for activities between the same payment platforms. The central bank is seeking public opinions about the new rules.
The new rules mainly target account opening, purchases and money transactions. Third-party payment agencies need to obtain at least three verifications from the government in order to set up “consumption accounts” for users. With at least five official verifications, the users can have “comprehensive accounts.” Currently, major third-party payment agencies like Alipay and WeChat Payment use verifications from the public security or bank systems.
Under the new rules, payments made through third-party payment accounts are limited to 5,000 RMB per day. Individuals who plan to pay more than that amount will have to use their bank accounts. Third-party quick payments via online banks on the other hand are limited to 200 RMB per transaction. These new restrictions are expected to impact both the convenience and efficiency of China’s future payment systems.
In addition to account transactions, the new rules will also impact the services that waive transaction fees for accounts in the same third-party payment platform. The no fee service will be limited to accounts that belong to the same individuals. Meanwhile, third-party payment agencies are not allowed to set up payment accounts for financial companies.
China’s central bank is accepting feedback on the new rules, which reinforce third-party payment security at the price of the convenience of online payment. People from the industry said the new rules will set the industry back and affect business. China currently has 270 licensed third-party payment agencies. In 2014, transactions through third-party agencies totaled 8 trillion RMB.