The Chinese central bank has heightened its scrutiny of the payments sector with a sharp increase in the value of penalties imposed since the start of 2020.
The People’s Bank of China (PBOC) has issued at least 59 penalties to Chinese payments platforms since the start of 2020 according to a 24 November report from Beijing Business Today.
These penalties were worth 303 million yuan in total, or well over twice the amount of the fines imposed on Chinese payments platforms in 2019.
2019 saw the issuance of 103 fines to 55 payment platforms by PBOC, with a total value of 132 million yuan.
“The number of fines has fallen and the penalty amounts have increased, which indicates that the payments sector is now subject to strict and heavy regulation,” said Su Xiaorui (苏筱芮), senior researcher with the Madai Research Institute (麻袋研究院).
Out of the 59 penalties imposed since the start of 2020 one has been for over 100 million yuan, while five have been for 10 million yuan and 10 have been in the million yuan range.
Allscore (商银信公司) incurred a 116 million yuan fine at the end of April 2020 as a result of non-compliant behaviour, for the largest Chinese payments sector fine on record.
Analysts say money-laundering is one of the focal areas for heightened regulatory scrutiny of the Chinese payment sectors.
“In recent years third party payments has continually been a focal point for heavy regulation, “said Huang Dazhi (黄大智), a senior researcher with the Suning Financial Research Institute.
“The issuance of giant hundred million yuan fines serves on the one hand to warn the many organisations in the sector who operate in a grey area, and on the other hand rectify problems which appeared during the previous period of excessively rapid development.”