Payment companies should not ignore rules; no player is too big to fail: PBC official

Chinese payment institutions should not ignore industry rules, and specific regulations will be unveiled for the sector as necessary, an official of the People’s Bank of China (PBC), the country’s central bank, said on Thursday.

The PBC issued two standards for domestic barcode payment business and security technology in December 2017, with both taking effect on April 1.

Many commercial banks and most domestic payment institutions have closely followed the new standards, but some payment institutions appear to be deliberately ignoring the rules, Fan Shuangwen, deputy head of the Department of Payment and Settlement at the PBC, told a meeting.

“We have received complaints and told related institutions to correct their behavior,” Fan was quoted as saying in a report by news site finance.sina.com.cn. “Domestic payment institutions should not try any way to ignore the rules, and that applies to some large institutions in the market in particular.”

These payment platforms should not think that they are “too big to fall or too big to be managed” and they shouldn’t pick and choose which rules to follow.

The authorities will announce new regulations for the payment industry in response to specific situations, Fan said.

Barcode payments have many advantages such as lower requirements and convenience, and these payments have played a vital role in enabling low-value transactions and advancing the domestic noncash payment environment, experts said.

The PBC announced in December 2017 that it was setting a daily transaction limit of 500 yuan ($79) via quick response code payments, which took effect on April 1.

Fan said the transaction limit can meet the demand of small and micro vendors, help protect customers’ finances and information, and force payment platforms to improve the security of their services.

“We developed every policy based on many expert opinions,” Fan said, adding that with the growth of technology, it is understandable that one single rule cannot solve all industry issues.

But since the rule has been announced, institutions must closely carry out it, Fan was quoted as saying in the report.