China Justice Observer

中司观察

EnglishArabicChinese (Simplified)DutchFrenchGermanHindiItalianJapaneseKoreanPortugueseRussianSpanishSwedishHebrewIndonesianVietnameseThaiTurkishMalay

China Regulates Non-Banking Payment Institutions

Fri, 15 Mar 2024
Categories: China Legal Trends

On 17 Dec. 2023, China’s State Council issued the “Regulation on the Supervision and Administration of Non-Banking Payment Institutions” (非银行支付机构监督管理条例, hereinafter the “Regulation”), which will come into effect on 1 May 2024.

In this Regulation, non-banking payment institutions refer to entities established within China, other than banking financial institutions, that have obtained a payment business permit to engage in the payment business, such as the transfer of monetary funds based on electronic payment instructions submitted by payees or payers.

The highlights of the Regulation are as follows.

  • The minimum registered capital of a non-banking payment institution to be established is CNY 100 million and shall be paid-up monetary capital. The People’s Bank of China (PBC) may increase this minimum capital requirement as necessary.
  • The non-banking payment business is divided into two types: the operation of stored-value accounts and the processing of payment transactions based on whether prepaid funds from payers can be received. The rules for the supervision and administration of these operations shall be separately formulated by the PBC.
  • The business systems and backups of non-banking payment institutions shall be stored within China. Non-banking payment institutions providing payment services for domestic transactions shall complete transaction processing, fund settlement, and data storage within China.
  • Non-banking payment institutions shall transfer pending payments according to payment instructions given by users. Pending payments refer to the pre-received and to-be-paid monetary funds actually received by non-banking payment institutions for processing payment transactions for users.
  • The ratio of net assets to the average daily balance of pending payments of non-banking payment institutions shall comply with the provisions of the PBC.
  • Non-banking payment institutions shall deposit pending payments with commercial banks.
  • Non-banking payment institutions shall process payment transactions through clearing institutions designated by the PBC and shall not provide clearing services or do so in disguise.

 

 

Photo by Chastagner Thierry on Unsplash

Contributors: CJO Staff Contributors Team

Save as PDF

You might also like

SPC's Revised Rules Extend Reach of International Commercial Courts

In December 2023, China's Supreme People’s Court's newly amended provisions extended the reach of its International Commercial Courts (CICC). To establish a valid choice of court agreement, three requirements must be met - the international nature, the agreement in writing, and the amount in controversy - while the 'actual connection' is no longer required.

SPC Releases Typical Cases of Punitive Damages for Food Safety

In November 2023, China's Supreme People's Court (SPC) released typical cases of punitive damages for food safety, emphasizing consumer rights protection and highlighting instances of tenfold compensation awarded to consumers for food safety violations.

SPC Adjusts Jurisdiction of Its IP Court

In October 2023, China’s Supreme People’s Court (SPC) issued “Decisions to Amend the Provisions on Several Issues Concerning the Intellectual Property Court”.

Rising Cyber Threat: SPP Highlights Overseas Fraud Escalation

In November 2023, China's Supreme People’s Procuratorate (SPP) revealed in its annual report a significant surge in cyber fraud cases involving overseas criminal groups, with a shift towards large-scale organizations operating abroad and engaging in more severe criminal activities.

China Regulates Non-Banking Payment Institutions

In December 2023, China’s State Council issued regulations for non-banking payment institutions, outlining minimum capital requirements, business operation divisions, and data storage mandates effective from May 1, 2024.