Third Party Payment Providers Receive 34 Fines in First Half Totalling 45mn Yuan

728

Chinese third party payment providers have been fined on more than 30 separate occasions in the first half of 2018, as regulators maintain heavy scrutiny of the sector.

Data provided to Securities Daily by Lingyi Caijing – Lingyi Zhiku (零壹财经·零壹智) indicates that third party payment providers In China received 34 separate fines in the first half, with recipients including Lakala Payment Co. (拉卡拉), All In Pay (通联支付) and Qiandai (钱袋宝).

Cnepay (中汇电子支付有限公司) and Easy Pay (易生支付有限公司) each received three fines from the  Chinese central bank, while All In Pay was fined on two occasions.

The total value of the 34 fines dispensed by regulators in the first half was 45 million yuan (approx. USD$6.79 million).

Tighter regulation of the payments sector has driven up the prices of licenses, with some industry insiders claiming that the current price for a full payments license is in excess of 1 billion yuan.

The sector has seen roaring growth, with total third party payment transactions reaching 107.3 trillion yuan and 160.4 trillion yuan in 2016 and 2017 respectively, for growth of 105.2% and 49.5%.

China’s third party payments market remains heavily dominated by incumbent giants Alipay and Tenpay, who account for a joint market share of as much as 92%.

The remaining 8% of the market is divided between a total of 241 smaller third party payments providers.

Observers believe that Beijing’s recent decision to sever direct links between third party payments providers and banks, forcing them to connect to a centralised online settlement platform, will give small companies greater opportunities to develop.

Regulators hope that the move will serve to clean up the payments sector by increasing the transparency of capital and information flows, and helping them to address problems such as money laundering and fraud.

Related stories

PBOC Puts Pressure on Third Party Payments with over 30 Fines in 2018 

China’s Third Party Payments Providers Will Sever Direct Ties to Banks