The People’s Bank of China (PBOC) has cracked down on the third party payments sector in 2018 with the issuance of a record number of fines.
Data from P2PEye.com (网贷天眼) indicates that as of 8 October PBOC had issued 109 fines with a total value of over 200 million yuan in 2018, as compared to 113 fines for all of 2017.
Analysts point out that both the number and value of fines issued by the Chinese central bank have seen a marked increase since the start of the year.
PBOC has focused its ire upon the third party payments sector, which was the recipient of all six of the fines issued that were worth in excess of 10 million yuan.
Payments companies receiving these hefty fines included Sandpay (杉德支付), which received a total penalty of 24.733 million yuan on 30 September, as well as Gopay (国付宝) and Union Mobile Financial Technology (联动优势), who received penalties of 44.472 million yuan and 24.248 million yuan respectively on 6 August for breaches of settlement provisions.
PBOC hit Kayou (卡友支付) with a fine of 25.825 million yuan on 20 July, ordering it to withdraw its operations from 25 provinces in China, while also meting out a fine of 22.477 million yuan to Yinsheng E-pay (银盛支付) on 15 June, and a fine of 25.614 million yuan to Dinpay in May.
Liu Gang (刘刚), founder and chief editor of Paynews.net, said that these “10 million yuan fines” were mainly directed at payments companies that had incurred a huge volume of customer complaints.
“A large volume of complaints means that the public reaction is significant, and a company suffers from a significant number of problems,” said Liu to P2PEye.
“For this reason regulators can’t just sit on the sidelines and watch, but can only become stricter in order to give the sector a warning.”
Liu Xinye (李欣烨), chief secretary of the Xiaomi Fintech Research Center, said that these record high fines are a sign of the determination of regulators to contain legal and regulatory breaches by payments companies, as well as the unprecedented volume of such breaches.