China Strengthens Supervision of Non-Bank Payments... Annual Payment Volume Reaches '7 Quadrillion'

Rapid Market Growth Led by WeChat and Zifubao

Chinese authorities are strengthening the management and supervision of non-bank payments, which exceed 7 quadrillion won annually.

On the 17th, the State Council of China announced the "Regulations on the Supervision and Administration of Non-bank Payment Companies." According to the regulations, the establishment of non-bank payment companies requires approval from the central bank, the People's Bank of China, and a business license. They must also meet standards for business systems, facilities, technology, and the continuity, security, and traceability functions of payment services. The regulations will take effect on May 1.

[Image source=Reuters Yonhap News]

The State Council stated, "Non-bank payment companies must ensure the safety of users' funds and information security," and "prevent payment accounts from being used for illegal financing, telecommunications network fraud, money laundering, gambling, and other illegal and criminal activities." It also specified that if the regulations are violated, the People's Bank of China may impose fines or restrict or suspend payment operations. Additionally, it clarified that payment companies must implement the policies of the Communist Party and the state.

China's non-bank payment market amounts to 1 quadrillion transactions annually, with a total value of 400 trillion yuan (approximately 7.3044 quadrillion won). It accounts for about 80% of the entire electronic payment market, with 185 related companies as of the end of last September. The average daily reserve balance exceeds 2 trillion yuan, and the number of service users surpasses 1 billion.

Following the announcement of the regulations, major operators Alipay and WeChat Pay expressed their commitment to actively implement the rules and strengthen consumer rights protection. Alipay stated, "We will provide consumers with the right to know, choice, and safety," while WeChat Pay emphasized, "We will firmly grasp the political nature of financial services and the characteristics of the people, adhering to the convenience of the people under the guidance of the authorities."

This content was produced with the assistance of AI translation services.