China issues third-party payment license

A Lastest News about Electronic Commerce in China

Last updated: 29 Jun 2011

The issue of third-party online payment permits in China this week will boost the sector's development through giving it a legal status, analysts said.

The People's Bank of China (PBOC), or the central bank, on Thursday announced its first batch of electronic payment licenses to 27 qualified third-party online payment platforms, including Alipay, Tenpay and 99bill.

It also stipulated that all the third-party payment businesses should obtain licenses before September, or cease doing business.

The move has long been awaited after the central bank said in June last year that non-financial institution payment service would be regulated, and that all businesses involved in the service must get licenses before Sept. 1, 2011.

The license covers payment transactions such as Internet payment, mobile phone payment, bank card acquiring service, issuance and accept of prepaid cards and currency exchange.

The move provides a legal status for the third-party payment sector so that it can develop in a more standard and healthy way, said Zhang Meng, an analyst with Analysys International, an Internet market information provider.

Third-party payment enterprises refer to those non-financial operators who work as the third party between buyers and sellers to provide payment settlement through Internet, telephones or mobile phones.

China has the world's highest number of Internet users, with about 457 million netizens, among whom 148 million were active online shoppers as of the end of last year.

China's online payment topped 1.09 trillion yuan (167.29 billion U.S. dollars) last year. The figure was 397.3 billion yuan in the first quarter this year, almost doubled year-on-year.

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Posted: 28 June 2011, last updated 29 June 2011

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