The third-party payment industry led by internet payment, mobile payment, prepaid card, POS (Point of Sale), etc. has continued to flourish since 2014 in China. In that way, what happened in 2016 in the third-party payment system and what happens next in 2017?
1. Apple Pay to be available in China
With the help of UnionPay, Apple Pay officiall landed into China and launched mobile payments services on 18th, Feb. 2016. Apple launched Apple Pay in the U.S. in 2014 and has expanded the service to the U.K., Australia and Canada. UnionPay's alliance with Apple is an extension of its plans to make the most of that growing market. However, it's not going to be an easy ride for Apple, since Chinese consumers are already used to online payments and in-store cashless transactions on their phones through WeChat and Alipay. WeChat, the popular messaging app that has a baked-in mobile wallet, and Alipay, the payments and local shopping app made by the Alibaba subsidiary, and both services are now accepted at a huge number of stores across China.
WeChat announced that it will begin charging a fee when users make a money transfer from their WeChat Wallet to a bank account starting March 1st.
Each user will have an exemption of RMB 1,000 (USD 144) in total, but once this amount is surpassed, users will be charged 0.1% of each transaction with a minimum fee of RMB 0.1. Other forms of payment and money transfers will remain free. An official statement of Wechat says the move is not aimed at making a profit, but paying due fees to the banks. Every time a transfer involves a bank account, the transaction on WeChat Payment is charged a certain fee by banks. Meanwhile, the statement by Wechat was doubted that WeChat is trying to induce users to spend more via WeChat Payment.
3. China Opens up Bank Card Clearing Services Market
The People's Bank of China (PBOC) and the China Banking Regulatory Commission have jointly issued the Measures for the Administration of Bank Card Clearing Institutions, effective 8 June 2016.
PBOC said that under the Measures domestic and foreign investors applying for the bank card payment clearing business licence will be subject to the same market access requirements in terms of licence conditions, application procedures and supervisory measures. From then on, except for UnionPay, there might be a coexistence of many clearing institutions in China. The senior management of Visa, MasterCard have claimed that they will actively apply for a liquidation license.
4. China carries out Administrative Measures for Online Payment Businesses
On December 28, 2015, the People's Bank of China published Administrative Measures for Online Payment Business of Non-bank Payment Institutions(the "Meatures"). The Meatures will be carried out on July 1st 2016. The Meatures state that there are three types of payment accounts, and the limit is a maximum of 200,000 balances. Really, the balance of 100,000 per year is sufficient to pay for an ordinary person. But for a financier, even 200,000, it still can not meet the needs of their financial management.
5. The first batch of 27 non-bank payment licenses renewal
August 12, the People's Bank announced on the official website confirmed on 27 non-bank payment institutions (including AliPay, UnionPay, TenPay, etc.) "payment business license" application for renewal decision. This "payment business license" is valid for five-year renewal deadline is May 2, 2021.
6. Alipay, WeChat will limit the number of transfers
Earlier, The central bank issued the most stringent new regulations: Alipay, WeChat will limit the number of transfers. The notice issued that since December 1st, the same person in the same bank can only open a class I, and peer within three months of remote access and transfer free of charge. Except that, the new regulations also require that banks and Payment institutions shall strengthen the monitoring of account transactions, which accounts without transaction records within 6 months of the opening day, the bank shall suspend its non counter business.
7. UnionPay launches standards for QR code payment
China UnionPay officially published the "Standards on UnionPay QR Code Payment" which mainly include two specifications - Security Specifications of CUP QR code Payment and Application Specifications of CUP QR Code Payment on December 12 (also known as the Double 12).
JD Finance, Banks, UnionPay have launched the payment products or services, the market competition based on the consumption scenes will be more intense.
Faced with such stringent policy restrictions, How to deal with this situation for the Third Party Payment Institutions led by AliPay and WeChat? Let's wait to see what wil happen in this 2017.
*: Website Epay.com and E-wallet services are owned by Epay Global Limited.
*: The money transfer and currency exchange services involved in Epay.com are provided by Epay Limited (Hong Kong), which holds a money service operator license granted by the Hong Kong Customs.
The money service operator license issued by the Hong Kong Customs does not give any form of permission to bitcoin or other virtual currency related businesses.