Bank tightens grip on online payment platforms’ reserve funds
Bank of China ntral bank, has nt days to tighten reserve funds of booming online rms, which could nsumers and uptry. ued an order sayanuary 14, 2019, of the third-party ms, which generuan in interest for very year, must be the PBC, accordon news website Wednesday.
Payment platforms will be required to close out individual accounts for reserve funds by the same date.
This is the latest step taken by the PBC, which has increasingly tightened its grip over online payment platforms. In the past 11 months, local banks have issued 16 fines totaling more than 2 million yuan ($209,309) to thirdparty payment platforms for “actions violating regulations,” the report said.
The total amount of reserve funds deposited by payment platforms with the PBC reached 995.6 billion yuan in October, ac- cording to the central bank.
Dong Dengxin, director of the Financial Securities Institute at Wuhan University of Science and Technology, told the Global Times on Thursday that the PBC’s move improves security for merchants and clients on the platforms.
“Irregularities like misappropriation of funds can be totally avoided in this way. The move will effectively curb financial crimes, avoid the systemic crosssystem spread of financial risks, prevent the risk of capital outflows, and maintain market stability,” Dong said.
As of Sunday, there were 238 licensed payment agencies, with 33 licenses having been revoked, according to the official website of the PBC.
“The regulation will prompt third-party payment institutions to improve their services, and promote the optimization and upgrading of the payment industry,” Dong said.
“Small payment platforms are being driven out of the market by higher costs. Big platforms will be able to handle these higher costs,” Dong said.