BEIJING, March 17 China's central bank is
considering regulations that would significantly limit the use
of third-party payment systems, including the payment arms of
Alibaba Holding Group and Tencent Holdings Ltd
The People's Bank of China released draft rules last week to
major banks for consultation, state media reported on Monday.
The measures would ban the payment companies from handling
They would also heavily limit spending by individuals using
third-party payment platforms and transfers from bank accounts
to accounts managed by third-party companies. The draft rules
restrict single purchases using third-party payment accounts to
5,000 yuan ($810), with a monthly limit of 10,000 yuan.
"We have reported our opinions to, and are in close
communication with, the PBOC," said a spokesperson with Alipay,
Alibaba's payment platform. "Given that the document is now
under consultation, we are not able to comment further."
Alibaba said on Sunday it had picked the United States for a
long-awaited initial public offering, ending months of
speculation about where it would float and dealing a blow to the
Hong Kong stock exchange.
China's online and mobile payment transactions have been
growing at a frenetic pace. The online payment market last year
increased by 42 percent to 7.4 trillion yuan ($1.2 trillion) in
transactions, according to Beijing-based consultancy iresearch.
That has fueled a clash between the financial sector and
internet companies, as online firms push into banking and ramp
up their own financial services, offering online payment options
and wealth management products.
Last week, China's central bank suspended the use of
payments made by scanning a type of bar code with mobile
devices, halting the rollout of new virtual credit cards by
Tencent and Alibaba.
Both companies announced they would launch cards, which can
use QR bar codes scanned by smartphones to process payments, in
partnership with China CITIC Bank Corp
The draft rules also would restrict one-time money transfers
through individual third-party payment accounts to 1,000 yuan,
with a cap place on the cumulative annual transfer of 10,000
yuan, hitting the ability for users to move their money into
wealth management products offered by Tencent and Alibaba.
In February, Alipay said it handled 900 billion yuan in
mobile payment transactions from more than 100 million users
last year, completing more mobile payments than U.S.-based
PayPal and Square Inc combined.
A central banker who helped draft the new proposals told
Caixin Media that the new rules were intended to limit the
operating scope of third-party payment companies to online
shopping, while prohibiting offline payments.