Source: China Fund News
Reporter: Comprehensive report with chapter

On December 17, the “Regulations on the Supervision and Administration of Non-bank Payment Institutions” (hereinafter referred to as the “Regulations”) were officially announced and will take effect from May 1, 2024. The Regulations consist of 6 chapters and 60 articles, which further integrate non-bank payment institutions and their business activities into the legal track for supervision. They aim to promote the healthy development of the non-bank payment industry, effectively protect the legitimate rights and interests of users, better serve the real economy, and meet the diversified payment and settlement needs of users.

According to the data, as of the end of September, there were 185 non-bank payment institutions (“payment institutions”) nationwide. The annual transaction volume of payment institutions exceeded 1 trillion yuan, with an amount of nearly 400 trillion yuan, accounting for about 80% and 10% of the country's total electronic payment business, respectively, with an average daily reserve balance of more than 2 trillion yuan, serving more than 1 billion individuals and tens of millions of merchants.

After the “Regulations” were issued, the major institutions in the payment market generally believed that as one of the most effective institutional arrangements in the payment field in recent years, the “Regulations” have laid the foundation for healthy competition and standardized healthy development for the future development of payment institutions. Payment institutions such as Alipay and WeChat Pay immediately stated that they will further improve relevant business rules, actively implement the “Regulations”, further strengthen the protection of financial consumers' rights and interests, better meet users' payment and settlement needs, and continuously improve the economic quality and efficiency of service entities.

Alipay: “Regulations” lay the foundation for payment institutions to regulate healthy development in the future

Consumer protection is a key area of focus under the Regulations. Alipay's deputy general manager Feng Qiao said that Alipay will further strengthen the protection of financial consumer rights and interests, insist on integrating financial consumer protection into corporate governance, corporate culture, and business strategies, and solidly raise the level of financial consumer protection.

First, in terms of optimizing product design, incorporating consumers' right to know, choice, and sense of security into product design; second, in terms of financial education and publicity, it deeply cultivates innovative consumer education work and makes full use of online advantages to create a special brand for inclusive education; furthermore, to achieve the full link of long-term control of consumer insurance risks, Alipay has independently developed the “Consumer Shield” intelligent consumer inspection capability to automate risk inspection, warning and assessment of product activity pages. Effectively fulfill financial consumer protection responsibilities and protect consumers' legitimate rights and interests.

Feng Qiao believes that the implementation of the “Regulations” has laid the foundation for healthy competition and regulated healthy development for the future development of payment institutions. The adoption of this regulation has further strengthened supervision of the entire chain and cycle of payment institutions, which is conducive to preventing risks in the payment industry. At the same time, under the influence of regulation, the payment industry will usher in further standardized and orderly development, which will also benefit the long-term development of the physical industry.

WeChat Pay (Pay): “Regulations” point the way for high-quality development of payment services

Zheng Haojian, general manager of Tenpay, said that the introduction of the “Regulations” has, on the one hand, raised the legal level of supervision of payment institutions, from original departmental regulations to administrative regulations, marking that the payment industry has fundamental regulations, which are conducive to strengthening industry supervision, improving regulatory efficiency, and establishing supervisory authority; on the other hand, it conforms to the development trend of the payment service market, lays a solid foundation for regulating the compliant operation of payment institutions, and points the way for high-quality development of payment services.

Zheng Haojian said that in the future, Tenpay will further deeply understand the Party Central Committee's important remarks and decisions on financial work, firmly grasp the political and popular nature of financial work, adhere to the purpose of small amounts and convenience under the guidance of the financial management department, focus on the main business, improve services, better meet users' payment and settlement needs, continuously improve the economic quality and efficiency of service entities, and inject more value and vitality into high-quality economic and social development.

Douyin (Hezhong Yibao): “Regulations” empower and protect the high-quality development of the payment industry

Hezhong eBao is a payment institution under the Douyin Group. The relevant person in charge of Hezhong Yibao said that what is expected is that the “Regulations” strengthen full-chain and full-cycle supervision of the non-bank payment industry, which is conducive to giving full play to the role of the law in securing the fundamentals of the industry, stabilizing expectations, and benefiting the long-term, and empowering and protecting the high-quality development of the payment industry.

The person in charge mentioned above stated that they will adhere to the purpose of small amounts and convenience, enhance the ability to serve the real economy and small and micro enterprises, focus on the main business, strengthen product innovation, and better meet the payment and settlement needs of Douyin Group users and merchants. At the same time, strengthen legal compliance and prudent management awareness and ability, abide by regulatory requirements such as institutional management, provision management, business management, risk monitoring and prevention, etc., ensure the safety of payment transaction data and funds, and effectively protect the legitimate rights and interests of financial consumers. It will also assume the main responsibility for preventing and preventing fraud and anti-gambling risks, and strictly prevent payment platforms from being used for illegal and criminal activities. Adhering to the principles of win-win cooperation, inclusiveness and openness, it will strengthen cooperation with banking financial institutions, clearing institutions and other non-bank payment institutions to promote mutual benefit and win-win situation and healthy competition in the industry.

Meituan (Money Pocket): The payments industry will move in a healthier, more compliant and more sustainable direction

Money Pocket is a payment institution owned by Meituan. Liu Xiaodong, general manager of Money Pocket Bank, said that the formal promulgation and implementation of the “Regulations” is conducive to improving market expectations and enhancing development momentum, and the payment industry will develop in a healthier, more compliant and more sustainable direction.

Liu Xiaodong believes that the “Regulations” establish a complete market-based mechanism in terms of entry and exit, business rules, etc., improving the fairness and transparency of the market, maintaining a fair competitive order, and promoting healthy competition and standardized development in the industry.

He said that in the next step, Money Pocket Treasure will consistently adhere to the purpose of small amounts and convenience, continue to improve the quality and efficiency of payment services, continue to explore safer, faster, more stable and more inclusive payment services, and contribute to the development of the real economy and serve people's livelihood. At the same time, we adhere to the bottom line of compliant management, actively maintain a fair competitive order in the payment market, and work with all parties in the industry to contribute to the high-quality development of the payment industry and better meet the needs of the real economy.

PayPal (PayPal): Helping the industry provide safer and more reliable payment services

Paypal Pay is a wholly-owned subsidiary of PayPal in China. “Paypal Pay has strengthened its confidence in serving the Chinese market for a long time, leveraging PayPal's global payment network, and working with all parties in the industry to serve the vast number of small and medium-sized enterprises overseas, improve the efficiency of cross-border capital and financial communication, and make due contributions to the high-quality development of cross-border trade.” Qiu Han, CEO of PayPal Payments (Beijing) Co., Ltd., said.

Strict admission of payment institutions is one of the important measures to ensure the development of the payment industry. According to Qiu Han, the “Regulations” have further improved and optimized the entry conditions and standards for payment institutions, making them more scientifically standardized. This measure will help improve the strength and service quality of the entire industry, and provide more secure and reliable payment services to a wide range of users and merchants.

eBao Pay: Helpful to promote fair competition in the payment industry

The relevant person in charge of eBao Pay said that the “Regulations” first complement the legal system relating to non-bank payment institutions in China's legal system, solve the problem of the low legal level of supervision of non-bank payment institutions, and are conducive to improving the effectiveness of supervision; second, the “Regulations” reclassify the business types of non-bank payment institutions according to “business substance”, reflect the concept of functional supervision, which is conducive to improving the professionalism and fairness of supervision; third, the “Regulations” requirements for the full life cycle management and business rules of payment institutions are conducive to guiding payment institutions to focus on their main business, better serve the real economy, and truly achieve it.” “Payment for the people”; fourth, the “Regulations” implement the “two unwavering” principles and treat all types of payment institutions equally, regardless of the scale of business, state-owned or private, domestic and foreign investment, which is conducive to promoting fair competition in the payment industry.

The person in charge said that in the next step, eBao Pay will, as always, adhere to the business development concept that compliance is productivity and competitiveness, help merchants digitally transform and lead the healthy and sustainable development of the payment industry based on its own position as payment experts in the industry.

China UnionPay: Promoting the sustainable and healthy development of the payment services market

Xie Qunsong, executive vice president of China UnionPay, said that the “Regulations” clarify the business boundaries of non-bank payment institutions, make it clear that non-bank payment institutions must not directly or in disguise carry out clearing services. Cross-agency payment services initiated should be handled through clearing agencies with corresponding legal qualifications, and transaction information should be submitted truthfully, accurately, and completely to clearing institutions to ensure the integrity, consistency, traceability, audit, and immutability of electronic payment instructions throughout the process. It will help promote the return of payment services to the four-party model centered on clearing institutions, ensure the security and transparency of transaction capital and information, promote fair participation of all parties in the industry in market competition, and promote the sustainable and healthy development of the payment services market.

Editor/Somer