Three major developments from China in the payments market

The buzz in the Chinese payments industry has been increasing. Below are three important developments.

China Post is looking to invest CNY100 million in mobile- and web-based payment services. An application filed by China Post’s Chingqing operation and management department and accepted by the People’s Bank of China shows that China Post intends to run independent operations to enable internet and mobile phone payments. It intends to independently develop the system and take responsibility for maintaining and upgrading it.

China Unionpay is working on a service that would enable users to have QR codes, generated on their handsets, be scanned to make payments. As per company insiders, the service would cover both online and offline mobile payments. Unionpay is also in talks with banks regarding promotion of the service. Both Alipay and Tencent, working with China’s Citic bank, have been issued a directive to halt plans to launch their respective QR-code-based services.

The Payments and Clearing Association of China (PCAC) is recommending stricter enforcement of exchange-funding rules targeting the third-party voucher systems that most exchanges made use of during the bank-account closures in May. A translation of the claimed statements clearly cites the prevention of users from using their bank accounts to deposit funds in bitcoin exchanges. The statements point out that third-party voucher sellers associated with Chinese bitcoin exchanges can be discovered by contacting the sellers via QQ messaging service or other communication platform. The PCAC recommends that banks share information on customers who, posing as sellers or exchanges, are able to open multiple bank accounts. Financial institutions are also required to report to the PCAC how they are tackling bitcoin risks.