With e-commerce becoming a bigger part of the economy in China and elsewhere, the People’s Bank of China has laid forth new rules to curb risks like financial fraud and money laundering. Alibaba Group Holdings and Tencent Holdings , two of the nation’s Internet giants back the new government policies.
The central bank tightened the regulations on non-banking online payment platforms by asking users to open online payment accounts with their real names and imposed a cap on maximum yearly payments through such platforms at 200,000 yuan ($30,910). The new regulation will take effect July 1, 2016, reported China Daily.
The regulator said that non-banking online payment platforms cannot directly provide financial services like lending, securities investment and insurance.
“The basic function of these platforms is to facilitate the development of e-commerce”, said Xie Zhong, director of the PBOC payment and settlement department.
The country’s Internet giants Alibaba and Tencent, which have online payment services, both issued statements on Monday that they support the new PBOC rules, as it will ensure the safety of users’ financial assets.
According to the new policy, for example, each account on WeChat can transfer at most 1,000 yuan through the “Lucky Money” function. If more money needs to be transferred, the users must provide three to five ways to verify identity, including bank accounts, driving license and social security ID.
Categories: Asia Unhedged