Bank tight­ens grip on on­line pay­ment plat­forms’ re­serve funds

Global Times US Edition - - BIZOVE -

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.

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