Payment Providers Kayou and Free My Pay Fined $5 Million, Ordered to Withdraw from Provinces
Two major Chinese payment providers have received fines totalling 34.74 million yuan (approx. USD$5.09 million) for a range of regulatory breaches, as well as orders to withdraw from those parts of the country where they’ve committed severe infractions.
The Chinese central bank announced on 30 July that its investigations had uncovered multiple regulatory breaches on the part of Kayou (卡友) and Free My Pay (付临门), including breaches in relation to management of acquiring transaction information and management of the real names of vendors.
The People’s Bank of China (PBOC) conducted its investigations into the payment and settlement operations of Kayou and Free My Pay during the period from October 2017 to January 2018.
PBOC said that it had confiscated 924,200 yuan in illicit proceeds from Kayou as well as applied a fine of 24.9009 million yuan, for a total penalty of 24.825 million yuan.
The central bank confiscated 1.4733 million yuan in illicit proceeds from Free My Pay and fined it 7.4495 million yuan, for a total penalty of 8.9228 million yuan.
PBOC also required that the two non-bank payment providers withdraw from bank card acquiring operations in areas of severe regulatory breach, which for Kayou encompass a total of 25 of China’s 31 province-level administrative entities, including Shanghai and Guangdong (excluding Shenzhen).
Free My Pay has been ordered to withdraw from bank card acquiring operations in Sichuan province.