The People's Bank of China (PBOC) issued detailed rules for the implementation of the Regulations on the Supervision and Administration of Non-bank Payment Institutions

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China Research Network

The Detailed Rules for the Implementation of the Regulations on the Supervision and Administration of Non-bank Payment Institutions (Draft for Comments) recently released by the People's Bank of China is a further refinement and supplement to the Regulations on the Supervision and Administration of Non-bank Payment Institutions, aiming to ensure the smooth implementation of the Regulations and provide clear guidance for the smooth transition of the non-bank payment market.

First of all, this measure reflects the importance that the central bank attaches to the construction of laws and regulations in the financial sector. With the rapid development of technology and the continuous innovation of payment methods, non-bank payment institutions are playing an increasingly important role in the market. Therefore, it is particularly important to formulate and improve relevant laws and regulations to ensure the standardized operation of the market and the protection of consumers' rights and interests.

Secondly, the promulgation of the Implementation Rules will help clarify the classification of payment business and the corresponding relationship between the old and new payment business. The reclassification of the payment business into stored value account operation and payment transaction processing will help to better understand and supervise the business model and risk points of non-bank payment institutions. At the same time, by clarifying the transition period arrangement and the connection between the old and new payment services, the uncertainty of the market can be effectively reduced and the smooth transition of the market can be promoted.

In addition, this initiative will also help promote the healthy development of the non-bank payment market. By clarifying regulatory requirements and regulating market order, potential risks can be prevented and resolved, and the legitimate rights and interests of consumers can be protected. At the same time, it will also help improve the service quality and innovation capabilities of non-bank payment institutions, and promote the sustainable and healthy development of the entire industry.

In short, the People's Bank of China's issuance of the Detailed Rules for the Implementation of the Regulations on the Supervision and Administration of Non-bank Payment Institutions (Draft for Comments) is an important step in the construction of laws and regulations in the financial sector, which will help clarify regulatory requirements, regulate market order, promote a smooth transition of the market, and promote the healthy development of the non-bank payment market.

According to the display released by the China Research Institute of Puhua Industry Research Institute

Non-bank payment refers to payment services provided by other institutions not through banks, such as WeChat, Alipay and other software for QR code payment or transfer. Relevant data from the People's Bank of China show that in recent years, the business volume of payment institutions has grown rapidly, and the current annual transaction volume of non-bank payment institutions exceeds 1 trillion transactions, the amount is nearly 400 trillion yuan, serving more than 1 billion individuals and tens of millions of merchants, at the same time, the payment business is closely related to the safety of the people's property, and the "Regulations" and "Implementation Rules" will urge all payment institutions to conduct business in accordance with laws and regulations to protect the legitimate rights and interests of users.

In the process of formulating the Detailed Implementation Rules, the PBOC fully assessed the impact of the relevant provisions on the operation and development of payment institutions and the payment service market, and gave a relatively sufficient transition period to existing payment institutions. At the same time, ensure that the same review standards are applied to the same licensing items, and promote the openness and transparency, sufficient basis, and standardized process of administrative licensing work of payment institutions.

The impact on payment institutions is mainly reflected in the following aspects: First, adhere to the administration according to law. The "Detailed Implementation Rules" strictly follow the administrative licensing items set out in the "Regulations", refine the relevant work requirements and specific handling procedures, and promote the openness, transparency, sufficient basis and standardized process of administrative licensing work of payment institutions. At the same time, the authority to approve changes in some payment institutions should be appropriately delegated to better create a business environment based on the rule of law. The second is to persist in seeking progress while maintaining stability.

The Detailed Implementation Rules maintain the continuity with the previous regulatory work and the consistency of macro policy orientation, clarify the connection between the old and new payment businesses, and set up a relatively sufficient transition period, with a maximum transition period of nearly 5 years for institutional renewal, so as to ensure the smooth transition of existing payment institutions and not change the scope of the original payment business license. The third is to insist on paying equal attention to regulation and development. According to the practice of rapid development of the payment market, the Detailed Implementation Rules will reasonably and appropriately increase the requirements for registered capital and net assets on the basis of full communication, enhance the risk defense capabilities of payment institutions, strengthen corporate governance and sound operation, and better serve the real economy.

According to Article 8 of the Regulations, the minimum registered capital of non-bank payment institutions shall be RMB 100 million and shall be additionally increased in accordance with the relevant rules. Specifically, if two or more of the above-mentioned types of business are engaged at the same time, the minimum added value of the registered capital shall be calculated in accordance with the provisions of items 1 to 4 of the first paragraph of this article according to the type of business and the geographical scope of business. This means that the minimum limit is RMB 400 million for fully licensed payment institutions operating nationwide.

The market development status of the mobile payment industry shows the following significant characteristics: First, the competition pattern of the mobile payment industry is relatively stable, and Alipay and Tenpay (including WeChat Pay and QQ Wallet), as industry leaders, have significant advantages in user volume, coverage scenarios and brand influence. These two giants occupy the vast majority of the market share, forming a duopoly pattern. Although other companies such as UnionPay and UMF have their own areas and user groups, they are generally not as frequent as WeChat and Alipay in terms of C-end usage.

Secondly, from the perspective of market size, the mobile payment business continues to grow. According to relevant data, the volume and amount of mobile payment business have shown a year-on-year growth trend. This shows that the popularity and application scenarios of mobile payment in daily life are constantly expanding, and it has become an important part of people's payment methods.

In addition, the business model of mobile payment is becoming more mature and diversified. At present, the mobile payment industry mainly has three operating models: operator-led, financial institution-led and third-party payment platform-led. Each of these models has its own advantages and disadvantages, but they are all driving the rapid development of the mobile payment industry.

At the policy level, the state has also issued a series of relevant policies to regulate, support and encourage the development of the mobile payment industry. These policies have pointed out the direction for the development of the mobile payment industry, provided broad market prospects, and also provided a good production and operation environment for enterprises.

However, with the rapid development of the mobile payment market, there are also some challenges and problems. For example, issues such as payment security, privacy protection, and data security are becoming increasingly prominent, requiring the industry to strengthen self-discipline and supervision. At the same time, with the continuous emergence and application of new technologies, the mobile payment industry also needs to continue to innovate and upgrade to adapt to market changes and user needs.

In general, the market development status of the mobile payment industry shows a steady growth trend, but it also faces some challenges and problems. In the future, with the continuous advancement of technology and the continuous changes in the market, the mobile payment industry will continue to maintain rapid development, bringing more convenience and innovation to people's lives.

As of the end of December 2020, the number of mobile Internet users in China reached 986 million, an increase of 89 million from the end of March 2020, and the number of mobile Internet users in China reached 1.007 billion by the end of June 2021, an increase of 21 million from the end of December 2020.

The rapid development of the Internet and the rapid spread of hand-held devices have brought consumers more convenience than ever before. In 2020, the number of mobile payment users in China reached 790 million, an increase of 57 million yuan from 2019 and a year-on-year increase of 7.78%.

Judging from the development trend, mobile payment will become more diversified. With the continuous progress of technology and the increasing maturity of the market, in addition to the existing third-party payment platforms such as WeChat and Alipay, bank cards, QR code payment, NFC payment and other methods will also be more widely used.

At the same time, with the application of biometric technology and blockchain technology in mobile payment, its security will also be greatly improved. In addition, mobile payment will further improve its convenience, such as in offline consumption scenarios, users can use their mobile phones to make NFC payments, and they can complete the payment without even turning on the mobile phone screen, which will further improve the convenience of consumption.

With the popularization of the Internet and the widespread use of mobile devices, mobile payment has penetrated into people's daily life, whether it is online shopping or offline payment, mobile payment is playing an increasingly important role. Especially in emerging markets, the potential for mobile payments is enormous. In addition, mobile payment has not only changed the way people pay, but also reshaped the pattern of the financial industry, bringing new opportunities for the development of the financial industry.

While the market outlook for the mobile payment industry is promising, there are some challenges to face. For example, how to ensure the safety of users' funds, how to improve payment efficiency, and how to meet the diverse payment needs of users are all problems that the mobile payment industry needs to solve. Therefore, mobile payment companies need to continue to innovate and improve their technology and service quality to meet market challenges and meet user needs.

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