Guotong Xingyi, Jialian Pay, Lakala, Shande Payment, Hyundai Financial Holding and other KYC are unfavorable and subject to administrative penalties

On December 4, Blue Whale Finance learned on the official website of the central bank that the Guangxi Zhuang Autonomous Region Branch of the People's Bank of China has recently disclosed a number of fines for third-party payment institutions. The companies involved include Guotong Xingyi, Jialian Pay, Lakala, Shande Payment, Hyundai Financial Holdings, etc.

A number of payment platforms have been fined for "failing to accurately identify and send complete transaction information".

According to the fine, the Guangxi branch of Fujian Guotong Xingyi Network Technology Co., Ltd. was fined 30,000 yuan by the central bank for "failing to accurately identify and send complete transaction information".

Guotong Xingyi has been fined several times this year. In June this year, Guotong Xingyi was warned by the central bank for the illegal act of "providing T+0 acquiring services for special merchants who do not meet the conditions", and confiscated 4.0199 million yuan of illegal income and fined 500,000 yuan. At the same time, Lin Fang, then director of the liquidation risk control center of Guotong Xingyi, was responsible for the company's above-mentioned illegal acts, was warned by the central bank, and was fined 50,000 yuan. Coupled with the fines of the management personnel, Guotong Xingyi was fined nearly 4.57 million yuan.

At present, its main business is to provide merchants with comprehensive payment services such as bank card payment, QR code payment, NFC payment, face payment, etc., focusing on sub-brands such as "Xingyi Pay", "Xingtong Bao", "Lu POS", "Xiaolu", "Star Pay", "Xingyi Partner", "Post Post Pay" and "Postal Convenience Service Station".

Newland is the parent company of Guotong Xingyi. Guotong Xingyi is the main body of Newland's payment business. Newland controls 100% of Guotong Xingyi through direct shareholding and indirect shareholding. The payment brand of Guotong Xingyi is "Xingyi Pay". According to Tianyancha, Guotong Xingyi was established in June 2010 and obtained a payment license in 2012, with a capital injection of 300 million yuan and a paid-in capital of 100 million yuan. It can engage in nationwide bank card acquiring business, and the payment license is valid until June 26 this year.

Shande Pay Guangxi Branch was also fined 30,000 yuan by the central bank for "failing to accurately identify and send complete transaction information".

In May 2021, the People's Bank of China (PBOC) announced the renewal of the Payment Business License for non-bank payment institutions. The scope of card acquiring business of Shande Pay has been reduced from the original national to regions other than Guangdong Province and Shanxi Province, and it can conduct business in Shenzhen.

At the end of 2021, the general business items of Shande Pay decreased again, and the projects that could be engaged in Internet payment, mobile phone payment, bank card acquiring (nationwide), and prepaid card issuance and acceptance (Shanghai, Beijing, Zhejiang Province, Jiangsu Province) have disappeared.

According to the official website of Shande Payment, its products for individuals include personal Shandebao, products for enterprises include enterprise Shandebao, Shandeyun account, and customs push orders, and products for merchants include Hippo payment, aggregate payment, bank card POS acquiring, and small and micro merchant POS acquiring.

Jialian Pay collected fines again, and the imperfect overseas regulatory system was good for the overseas payment business of the shareholder Xinguodu

Jialian Pay Guangxi Branch was also fined 30,000 yuan for "failing to accurately identify and send complete transaction information". In November, the company was found guilty of "violating the regulations on liquidation management, violating the regulations on merchant management, and failing to conduct due diligence on outsourcing service providers." "Three violations, was warned by the Shenzhen Branch of the People's Bank of China, confiscated 95.19 yuan of illegal gains, and fined 2.99 million yuan. A total of nearly 4 million yuan was confiscated.

"Jialian Pay" is a listed company of Xinguodu (300130. SZ). According to the financial report, Jialian Pay's operating income in 2022 will be 3.060 billion yuan, a year-on-year increase of 29.12%, and the operating profit will be 177 million yuan and the net profit will be 36.0607 million yuan. In 2022, the cumulative transaction flow processed will be about 2.58 trillion yuan, a year-on-year increase of 31%.

Due to the "code hopping" incident, when Xinguodu released its 2022 financial report this year, it mentioned that the company's non-operating expenses were 219 million yuan, accounting for 377% of the total profit, and the main reason was "involving the return of funds", which had a significant impact on the current profit. In other words, the specific amount to be refunded is 219 million yuan.

Founded in May 2009, Jialian Pay obtained the payment license for the nationwide bank card acquiring business on June 27, 2012, mainly by deploying POS machines to merchants, providing bank card acquiring and value-added services, so as to obtain machine sales or leasing and handling fee income. At the end of 2017, Xinguodu signed an equity transfer agreement with the shareholders of Jialian Pay to acquire 100% of the equity of Jialian Pay at a price of 710 million yuan. Jialian Pay has received large fines due to poor anti-money laundering, and its "Lishu" APP was named by the Guangzhou Provincial Public Security Department for reading user contact data, allowing applications to send SMS and MMS messages, resulting in unexpected charges, and allowing applications to record audio.

On June 26, 2022, the People's Bank of China announced the renewal of the "Payment Business License" of non-bank payment institutions, and Jialian Pay was "suspended from review". According to interface news, the recent franchisee disputes and profit sharing problems of Jialian Payment have intensified. At the beginning of 2021, Jialian Pay was frequently complained by merchants and partners due to problems such as outsourcing of acquiring layers, lax risk control of merchants, and arrears of profit sharing to franchisees, and its financial compliance was questioned.

As a local payment brand in China, Jialian Pay has repeatedly touched the red line during its business development, but Xinguodu's choice is not to vigorously rectify its company's business products, but to set its sights overseas. "Because the overseas network environment itself lags behind that of China, which may be equivalent to China 10 years ago, so recall that 10 years ago, China's P2P, cash loans, pos, etc., were almost like that, and the regulatory system and environment have not fully kept up with the development of the market. That's why most of the fintech companies in the early stage of P2P, high-tech bosses, charterers and payment players are targeting overseas markets – many of their businesses are not compliant in China. A company executive with senior experience in the payment industry told Blue Whale Finance.

Ticket "regular collectors" Lakala and Hyundai Financial Holdings "report" as usual

Lakala Pay Guangxi Branch was also fined 30,000 yuan for failing to accurately identify and send complete transaction information. In August this year, the Beijing branch of the People's Bank of China released an administrative penalty information showing that Lakala was fined for three violations.

Specifically, the types of illegal acts in Lakala include: failure to fulfill customer identification obligations in accordance with regulations, failure to submit large-value transaction reports or suspicious transaction reports as required, and transactions with unidentified customers. In response, the central bank fined Lakala 8.754 million yuan. At the same time, Wu, then vice president of Lakala, was fined 96,800 yuan for being responsible for the above-mentioned illegal acts in Lakala.

According to public information, Lakala was established in 2005 and was one of the first third-party payment institutions to obtain the "Payment Business License" issued by the People's Bank of China in 2011, with a registered capital of 802 million yuan, and landed on the Shenzhen Stock Exchange on April 25, 2019.

Hyundai Financial Holding Guangxi Branch was fined 20,000 yuan for failing to implement the real-name management requirements of special merchants and failing to set up acquiring bank settlement accounts in accordance with regulations. Hyundai Financial Holdings, like Lakala, is also a "regular collector" of fines

In October this year, the Hubei branch of the People's Bank of China released administrative punishment information, pointing to the Hubei branch of Hyundai Financial Holdings. According to the fine, Hyundai Financial Holding Hubei Branch was warned by the People's Bank of China for failing to strictly regulate business cooperation with outsourcing service agencies, confiscated about 64,000 yuan of illegal income, and fined 600,000 yuan. At the same time, Zhu Jianguo, then general manager of Hyundai Financial Holdings' Hubei branch, was responsible for the above illegal acts and was warned by the central bank and fined 60,000 yuan.

Hyundai Financial Holdings is a modern payment entity, wholly owned by National Modern Financial Holdings Co., Ltd., and its shareholders include Sichuan Yongan Investment Real Estate Co., Ltd., Erenhot Financial Holdings Co., Ltd., South China New Energy Base Co., Ltd., Beijing Langzheng Real Estate Co., Ltd., etc., and many of them are related to Sichuan enterprises.

According to the official website of Hyundai Pay, the company was registered in Chengdu in 2010 with a registered capital of 100 million yuan. The Company obtained the Payment Business License on December 22, 2011 and completed the renewal of the Payment Business License in December 2021 until December 22, 2026.

Hyundai Financial Holdings claims that the company's main business model is to provide payment services for the gas station industry around the field of large travel, and at the same time expand related car washing, car decoration, beauty, maintenance, fast repair and fast maintenance and other automotive aftermarket payment services. In addition, it also provides payment services for traditional businesses such as catering, retail, and convenience stores. It provides services such as bank card acquiring, Internet payment, aggregate payment scanner box scanner, and Dupay e-wallet.