China’s central bank released detailed regulations for online payment services by non-bank institutions in the latest effort to contain possible risks in the booming Internet finance industry. The new rules issued on Monday require real-name registration for all non-bank payment accounts and classifies them into three categories depending on the security levels, the Global Times reported on Tuesday. Also Read - Single QR code for UPI and Bharat QR based e-payments launched by Pine Labs
The size of payments allowed through such accounts will then range from 1,000 yuan ($155) to 200,000 yuan per year. Transactions through banking payment platforms would not be restricted by the regulation, the central bank said. The aim of the policy is partly to 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 vulnerable to possible risks. Also Read - YouTube Rewind is now the most disliked video on YouTube, ever!
Since the creation of Alibaba’s Alipay, China’s third-party payment industry has expanded rapidly. In the first three quarters of 2015, payment institutions’ online transaction volume totaled 32.97 trillion yuan, surging 98.8 percent year on year. In addition to limiting the size of transactions, the new regulation also bans payment institutions from opening accounts for firms engaged in financial businesses. Also Read - IRCTC online ticket booking: Your easy guide to book Indian Railways train tickets online
The new policy will come into effect from July 1, 2016.