Business / Gadgets

China issues rules to strengthen online payment security

(Agencies) Updated: 2014-04-18 16:18

SHANGHAI - China will limit the amount of money consumers can transfer to third-party online payment platforms, aiming to protect banks and consumers from fraud amid an explosion of online and mobile payment transactions.

Banks will be obliged to limit how much money an individual can transfer to platforms such as Alibaba Group Holding's Alipay per transaction or on a single day, based on the person's financial status, showed a document issued by the central bank and banking regulator.

China issues rules to strengthen online payment security
PBOC highlights virtual payment risks

China issues rules to strengthen online payment security

Lenders such as the Industrial and Commercial Bank of China Ltd already limit transfers to Alipay to 50,000 yuan ($8,000) per month, in part to slow deposits leaving for high-yielding money-market funds such as Alibaba's Yu'e Bao.

But by June 30, all banks must be prepared to implement transaction limits and also establish a means of verifying consumers' identities when they link their accounts at third-party payment platforms to their bank accounts.

"The requirements governing the establishment of business relations between commercial banks and third-party payment institutions are aimed at strengthening management of such business," the regulators said in the document.

"They are also put forward to protect the safety of commercial bank clients' information, funds and bank accounts and maintain the clients' legitimate rights."

The document from the People's Bank of China (PBOC) and China Banking Regulatory Commission (CBRC), dated April 3, was reported by the Shanghai Securities News on Friday and published in full on the website of China Business News.

It comes at a time absent of any obvious increase in online fraud, and the rules do not contain more draconian measures that local media reported were under consideration, such as limiting individual transfers to 5,000 yuan or a monthly total of 10,000 yuan.

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