Settlement regulations to benefit smaller players

China's third-party payment providers now face stricter rules requiring them to be connected to a central clearing house for settlement, part of Beijing's broader oversight of the burgeoning market as it upholds financial security.

From July 1, all payment transactions handled by third-party providers need to go through the Online Settlement Platform for Non-Bank Payment Institutions, enabling better regulation and tracking of capital flows within the country.

Under the new rule, Alipay, Tenpay, and a long list of third-party players comprising China's 40 trillion-yuan ($6 trillion) third-party payment market in the quarter ended March have routed their transactions through the new online clearing house.