Third-party payment regulations toughened
Updated: 2010-12-01 09:35
By Chen Limin (China Daily)
Third-party transaction companies, such as Alipay and PayPal, have long been a popular online payment option. The People's Bank of China is seeking to enhance regulation of the rapidly expanding market. [Photo/China Daily]
PBOC requires online transaction firms to obtain business licenses
BEIJING - China may accelerate the pace of regulation in the country's booming third-party payment market, as the media reported that the People's Bank of China (PBOC) may issue a license for companies to conduct business in China by the end of the year.
Ouyang Weimin, director of PBOC's payment and settlement department, said on Monday that it is "absolutely possible" for the central bank to issue the license within the time frame, according to a report from Beijing News.
Ouyang added that companies, whether State-owned or private enterprises, will be eligible for a license as long as they are in line with PBOC requirements, and that there is no limit on the number of the licenses available.
The central bank in June said that non-bank payment service providers in China will have to apply for a license within one year of Sept 1 to continue operations in China.
The companies will have to inform the central bank of the commission rates they charge for third-party transactions, and also be subject to periodic checks.
"This (Ouyang's remark) means that China is quickening its pace in guiding the third-party payment market towards a more orderly development," said Zhang Meng, an analyst with domestic research firm Analysys International.
The central bank was not available for immediate comment on Tuesday.
Some third-party payment companies, however, don't think it will be possible to obtain the license this year.
"We haven't applied for the license because requirement details have not been released yet," said Wing Zhong, a senior brand manager at the third-party payment service provider International Payment Solutions (Hong Kong) Ltd, adding that the company is actively preparing for the application.
The domestic third-party payment industry has registered some high-speed developments during the past few years.
Earnings may exceed 1 trillion yuan ($150 billion) by the end of this year, with total revenues reaching 454.6 billion yuan over the first half of this year, up 89 percent year-on-year, according to figures from Analysys International.
Analysts said the license will help consolidate the market, and will exclude companies that are not competent enough.
Alipay, the online payment arm of China's e-commerce giant Alibaba Group, is the biggest player in the market, accounting for about half over the previous third quarters, followed by Internet conglomerate Tencent's Tenpay, which took 24.5 percent.
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