China's Central Bank Fines Third-Party Payment Platforms for Non-Compliance Again
Liao Shumin
/SOURCE : Yicai
China's Central Bank Fines Third-Party Payment Platforms for Non-Compliance Again

(Yicai Global) Sept. 15 -- The Shanghai office of China's state bank, the People's Bank of China (PBOC), has imposed fines on seven third-party payment institutions so far in September. The bank has increased the frequency of financial penalties in the industry this year with 34 firms fined last month.

Companies receiving fines so far this month include Shanghai Sand Information Technology System Co. (Sand Pay), All In Pay Network Service Co., Zhonggang Yintong Information Technology Services Co. and Eastern Pay Information Technology Co., PBOC said on its website.

The seven institutions were penalized for violating payment business rules. Sand Pay faced the largest fine of CNY850,000 (USD129,000) and illegal proceeds totaling CNY349,100 were confiscated. The other six platforms were fined between CNY10,000 to CNY60,000 each.

This is not the first time that PBOC has punished Sand Pay and All In Pay.

All In Pay was fined CNY11.1 million last year for failing to implement real-name requirements for merchants and fabricating bank card transaction information. The bank confiscated illegal gains of CNY3.03 million.

Sand Pay received respective penalties of CNY250,000 and CNY590,000 from PBOC's Dalian and Fuzhou offices during the first half of this year for failing to identify clients and violating administration rules on anti-money laundering settlements.

The central bank stopped issuing third party payment licenses in March 2015 and has scrutinized some 271 licenses already awarded. PBOC has revoked 24 payment licenses so far, cutting the total number of licensed agencies to 247.

As regulators intensify scrutiny of the third-party payment industry, the market will become increasingly competitive and a shake-out will come about, market insiders contend. This will result in key players becoming even stronger and the weaker players being eliminated.

Major Chinese companies may also look to expand into the market. One example is major property developer China Evergrande Group [HKG:3333], which obtained a third-party payment license through its CNY570-million acquisition of Jifutong Payment Co. last year.

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Keywords: Third-Party Payment Platform , Pboc , Penalize