PBOC Warns Payments Giants They’re Not Too Big for Regulation


The Chinese central bank has issued a stern warning to the country’s payments giants against using their exorbitant scale to flout government regulations in relation to barcode-based technology and user security.

Fan Shuangwen (樊爽文), vice-head of the People’s Bank of China Payments Department, said that Chinese payment groups must refrain from “thinking  of ways to overlook regulations,” and warned that the sector’s leading enterprises “cannot think that they’re too big to be regulated.”

Fan made the remarks at the release of the “China Payments and Clearing Sector Report (2018)” (中国支付清算行业运行报告(2018) on 26 April.

PBOC has just launched new regulations governing barcode payments, stipulating that from 1 April the total value of the transactions made via static barcodes from a single bank account or payments account held by a single customer within a given day cannot exceed 500 yuan.

While the new regulations have created a stir in the payments sector, Fan said that they are justified by security concerns.

According to Fan the Chinese central bank divides payment technologies into of four safety categories, and the 500 yuan threshold applicable to technology in the D-category, which is the lowest level of safety.

“While barcodes are convenient, low-cost and easy to use, their security is poor, they are easy to replace, and they can be infected with Trojan horse viruses.

“Over the past several years there have already been a considerable number of such cases.”

Fan said that the cap is intended to satisfy the demand for convenient payment while still ensuring safety, as well as serve as a means for spurring payments companies to step up their security.

Mobile payments account for a huge chunk of Chinese commercial transactions, with the China Payments and Clearing Sector Report (2018) indicating that last year non-bank payment organisations handled a total of 7.3 billion barcode-based transactions worth a total of 910 billion yuan.

Individual transactions worth between 1 and 100 yuan accounted for 33.68% of all such transactions, while those worth between 100 and 500 yuan accounted for 52.65%.