The Asia Global Payment Summit. Bali, Indonesia. 10-11 October 2019

Two More Payment Companies Suspend Operations Amidst Heightened Regulation

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At least 33 Chinese payments companies have had their licenses revoked amidst tighter scrutiny from regulators.

Tianxia Zhifu (天下支付) and Xinjiang Yikatong (新疆一卡通) are the two latest Chinese payments companies to terminate operations according to a report from Securities Daily.

Tianxia recently issued an announcement via its official website calling for vendors with outstanding balances to provide their relevant information as soon as possible, as well as apply subsequently for funds settlement with the People’s Bank of China (PBOC).

Industry observers say the announcement serves as a sure sign that all payments operations have been suspended by Tianxia, and that the company has entered the final stage for processing of residual issues.

On 8 August Xinjiang Yikatong announced via its official WeChat account that its payments operations license had expired, and that it had suspended issuance of pre-paid cards and recharge operations as of 10 July.

Data from the Chinese central bank indicates that the payments operating licenses for both Tianxia Zhifu and Xinjiang Yikatong were scheduled to expire on 9 July 2019.

As of 15 September the Chinese central bank had confirmed the cancellation of the payments licenses of at least 33 entities operating within China.

Xinjiang Yikatong was founded in 2006 while Tianxia Zhifu was established on 5 November 2009. Both companies obtained their third party payments license from the Chinese central bank in July 2014.

“Strong regulation of the payments sector will continue” said Huang Dazhi (黄大智), senior analyst from the Suning Financial Research Institute.

“Looking at current regulatory policy, stronger regulation is directed more at operations in breach of law and regulations by payment organisations, with a focus on compliant operation by license-holders.”

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