Sina Technology News, June 30th afternoon message from the official website of the People's Bank of China shows that the relevant person in charge of the People's Bank of China answered reporters' questions on issues related to the "Management Measures for Payment Services by Non-financial Institutions". According to them, as of the end of the first quarter of 2010, a total of 260 non-financial institution legal entities submitted payment business registration materials to the People's Bank of China.
Below is the full text of the Q&A:
1. Question: What are the background and significance of issuing the Measures?
Answer: With the rapid development of network information and communication technology and the continuous specialization of payment services, more and more non-financial institutions have participated in payment businesses through internet, mobile phones, and other information technologies. Non-financial institutions providing payment services, cooperating with and competing against banks, have become an important force. Traditional payment services are generally undertaken by banking departments, such as cash services, bill exchange services, direct transfer services, etc., while emerging non-financial institutions intervene in the payment service system, using electronic means to provide front-end payment or back-end operation services for market traders, and are often referred to as "third-party payment institutions." Practice has shown that non-financial institutions use information technology and electronic means to provide payment services, greatly enriching service methods, expanding the breadth and depth of payment businesses provided by banking financial institutions, effectively alleviating social problems such as queuing and change difficulties caused by insufficient banking financial institution outlets. The diversified and personalized characteristics of non-financial institution payment services better meet the payment needs of e-commerce (e-commerce channel) companies and individuals, promote the development of e-commerce, and play a positive role in supporting macroeconomic policies such as "stimulating consumption and expanding domestic demand." Although non-financial institution payment services mainly focus on retail payments, their business volume is still small compared to the payment services provided by banking financial institutions, but they serve a large number of customers, mainly internet users, mobile phone users, bank card and prepaid card holders, and their influence is very extensive. As of the end of the first quarter of 2010, a total of 260 non-financial institution legal entities submitted payment business registration materials to the People's Bank of China, most of which were engaged in internet payment, mobile payment, telephone payment, and issuance of prepaid cards.
With the continuous expansion of the scope and scale of non-financial institution payment services and the promotion of new payment tools, as well as the increasingly fierce market competition, some inherent problems in this field gradually surfaced, and new risk隐患also emerged one after another. Such as the rights protection issue of customer reserve funds, the violation issue in the issuance and acceptance business of prepaid cards, the fulfillment issue of anti-money laundering obligations, the security issue of information systems related to payment services, as well as the issue of violating market competition rules and disorderly engaging in payment services. These problems cannot be solved solely by market forces and must be timely prevented and corrected through necessary regulations and supervisory measures.
The leadership of the Party Central Committee and the State Council attaches great importance to the supervision of payment services by non-financial institutions and has made many important instructions. As the statutory supervisor of the national payment system, the People's Bank of China conscientiously implements the requirements of the Party Central Committee and the State Council regarding "vigorously developing financial markets, encouraging financial innovation" and "strengthening risk management, improving the effectiveness of financial regulation." While encouraging various payment service providers to continuously enrich payment methods and improve payment service efficiency through business innovation to meet the constantly changing payment service demands of the public, it vigorously promotes the construction of relevant systems in the payment service market, strengthens the supervision and management of payment services by non-financial institutions, and prevents all kinds of financial risks. Based on organizing non-financial institution payment service registration, soliciting opinions and suggestions from all sectors of society, and learning from international experiences, the People's Bank of China formulated and issued these Measures.
The formulation and implementation of the Measures are important practices guided by the scientific development concept for the People's Bank of China to supervise and manage the payment system. It is a significant measure to implement the instructions of the leadership of the Party Central Committee and the State Council and to meet the wishes of the public. The introduction of the Measures meets the needs of non-financial institutions to develop in a standardized and orderly manner based on equal competition rules, the needs of consumers to protect their legitimate rights and ensure fund safety, and the needs of the country to encourage financial innovation, develop financial markets, and maintain financial stability and social stability. It will undoubtedly have a positive and important impact on the healthy development of our financial system.
2. Question: What is the guiding ideology of the Measures?
Answer: The People's Bank of China adheres to the guidance of the scientific development concept, strengthens the supervision and management of payment services by non-financial institutions, clarifies the work思路for supervising and managing payment services by non-financial institutions as "combining national conditions, promoting innovation, market-led, standardized development," and accordingly determines the guiding ideology of the Measures as "balancing standardized development with promoting innovation."
"Standardized development" mainly refers to establishing a unified market access system and strict supervisory mechanism for payment services by non-financial institutions. Ensuring that different institutions follow the same rules when engaging in the same business, preventing unfair competition, protecting the legitimate rights and interests of parties, and maintaining the stable operation of the payment service market.
"Promoting innovation" mainly refers to adhering to the market-oriented development direction of payment services, encouraging non-financial institutions to innovate continuously under the premise of ensuring safety, with the market as the main driver, to better meet the payment service demands of social economic activities.
3. Question: How do countries around the world regulate payment services by non-financial institutions? Does the Measures draw on international experience?
Answer: Internationally, governments in countries where the non-financial institution payment service market developed earlier and faster have gradually shifted from a "self-regulatory laissez-faire" approach to a "compulsory regulatory" approach. The United States, the European Union, and most economies require qualified institutions to engage in payment services in an orderly and standardized manner from the perspective of protecting customer rights. Specific measures include implementing targeted business licenses, setting necessary entry thresholds, establishing inspection and reporting systems, protecting customer rights through asset guarantees, and strengthening management of termination, withdrawal, and revocation.
The United States defines similar institutions (including non-financial institutions and non-bank financial institutions) as money service businesses. More than 40 states in the U.S. have enacted laws regulating money services based on the Uniform Money Services Act. These laws generally emphasize managing and standardizing non-bank institutions engaged in money services through licensing. Institutions engaged in money services must obtain special business operating permits and meet requirements regarding investment entities, business premises, capital strength, financial condition, professional experience, etc. Money service institutions should ensure high liquidity and safety of transaction funds and must not engage in deposit and loan business similar to banks or arbitrarily retain and use customer transaction funds. These institutions must also comply with anti-money laundering regulations and ensure data information security.
The EU has successively formulated the "Electronic Money Directive" and the "Payment Services Directive in the Internal Market" for institutions issuing and clearing electronic money, and revised the "Electronic Money Directive" again in 2009. These laws emphasize that each EU member state should implement a business license system for electronic money institutions and payment institutions, ensuring that only institutions complying with prudent regulatory principles can engage in such businesses. Payment institutions must strictly separate their own funds from customer funds and provide insurance or similar guarantees for customer funds; the total amount of current deposits and sufficiently liquid investments for electronic money institutions providing payment services must not exceed 20 times their own funds. Similarly, the UK's "Financial Services and Markets Act" requires business licenses for institutions engaged in electronic payment services, and electronic money institutions must guarantee customer pre-paid value with specified liquid assets, with the total amount of customer pre-paid value not exceeding eight times their own funds.
South Korea, Malaysia, Indonesia, Singapore, Thailand, and other Asian economies have successively promulgated laws and regulations requiring electronic money issuers to obtain authorization or permits from central banks or financial regulators, and set upper limits on stored-value card amounts.
China's non-financial institution payment services started late but developed rapidly, with related issues gradually surfacing as the business continued to grow. The People's Bank of China established a working思路for supervising and managing non-financial institution payment services that conforms to China's national conditions, based on a comprehensive and objective analysis of the development trends of non-financial institution payment services and drawing on international experience.
4. Question: Please introduce the main contents of the Measures.
Answer: The Measures consist of five chapters and fifty articles, with the main contents being:
Chapter One General Provisions, mainly stipulates the legislative basis, purpose, objects regulated by the Measures, application and licensing of payment businesses, supervisory responsibilities of the People's Bank of China, and overall operating principles for payment institutions' payment businesses.
Chapter Two Application and Licensing, mainly stipulates the market entry conditions for non-financial institution payment services and the two-level approval process for the "Payment Business License" by the People's Bank of China. Market entry conditions mainly emphasize that the applicant's institutional nature, registered capital, anti-money laundering measures, payment business facilities, credit status, and major investors should meet qualification requirements. In addition, it clarifies the approval requirements for changes and other matters by payment institutions.
Chapter Three Supervision and Management, mainly stipulates the responsibilities and obligations that payment institutions should bear in terms of standardized operations, fund safety, system operation, etc. Standardized operations mainly emphasize that payment institutions should conduct payment businesses within the approved scope, file and disclose business fee situations, formulate and disclose service agreements, verify customer identity information, keep customer business secrets, preserve business and accounting archives, etc. Fund safety mainly emphasizes that payment institutions should store accepted customer reserve funds in a dedicated account at the same commercial bank and use them only according to customer requirements. System operation mainly emphasizes that payment institutions should possess necessary technical means and disaster recovery handling capabilities and emergency response capabilities, etc. In addition, payment institutions should also cooperate with the People's Bank of China's lawful inspections and supervision, etc.
Chapter Four Penalties, mainly clarifies the corresponding legal liabilities of responsible subjects such as staff members of the People's Bank of China, commercial banks, and payment institutions.
Chapter Five Supplementary Provisions, mainly clarifies transitional period requirements, implementation dates, etc. of the Measures.
5. Question: What payment services can non-financial institutions provide?
Answer: The Measures clearly define non-financial institution payment services as monetary fund transfer services provided by non-financial institutions as intermediaries between payers and payees, including online payments, issuance and acceptance of prepaid cards, and bank card acquiring, etc.
(1) Online payment business. The so-called online payment referred to in the Measures means the act of transferring monetary funds between payers and payees by non-financial institutions relying on public networks or dedicated networks, including currency exchange, internet payment, mobile phone payment, fixed-line phone payment, digital TV payment, etc.
(2) Prepaid card issuance and acceptance business. The so-called prepaid card referred to in the Measures means a prepaid value issued for profit-making purposes and used to purchase goods or services outside the issuing institution, including prepaid cards issued in the form of magnetic strips, chips, etc., as cards, passwords, etc.
(3) Bank card acquiring business. The so-called bank card acquiring referred to in the Measures means the act of collecting monetary funds on behalf of bank card designated merchants through point-of-sale (POS) terminals, etc.
(4) Other payment businesses determined by the People's Bank of China based on the development trends of the payment service market, etc.
6. Question: Why is a business licensing system implemented for non-financial institution payment services?
Answer: According to the requirements of the State Council for "establishing an open, equal, and standardized service industry access system and encouraging private capital to enter," the People's Bank of China, based on laws and regulations such as the "People's Bank of China Law," and recognized by the national administrative approval department, implements a payment business licensing system for non-financial institution payment services. Whether it is a non-financial institution with state-owned capital or private capital, as long as it complies with the provisions of the Measures, it can obtain the "Payment Business License." The aim of the Measures is to select non-financial institutions with good credit levels, strong profitability, and certain operational experience through strict qualification requirements, allowing them to enter the payment service market and conduct payment businesses under the supervision and management of the People's Bank of China, effectively safeguarding the legitimate rights and interests of the general public. No non-financial institution or individual may engage in or disguisedly engage in payment businesses without the approval of the People's Bank of China.
The People's Bank of China imposes no quantity restrictions on the "Payment Business License," encouraging all qualified non-financial institutions to compete equally in the payment service market and promote the optimal allocation of resources in the payment service market.
7. Question: What conditions must non-financial institutions meet to provide payment services?
Answer: The Measures stipulate that non-financial institutions providing payment services must meet corresponding qualification conditions to establish a unified and standardized market access order for non-financial institution payment services and strengthen the sustainable development capability of non-financial institution payment services. The main conditions that non-financial institutions providing payment services must meet include:
(1) Commercial existence. Applicants must be limited liability companies or joint-stock companies legally established in China and be non-financial institution legal entities.
(2) Capital strength. Applicants applying to conduct payment businesses nationwide must have a registered capital of at least RMB 100 million; applicants applying to conduct payment businesses within the same province (autonomous region, municipality) must have a registered capital of at least RMB 30 million, and both must be paid-in monetary capital.
(3) Major investors. Major investors of the applicants (including those who own actual control rights and hold more than 10% equity) must meet requirements regarding corporate legal person nature, relevant field experience, certain profitability, etc.
(4) Anti-money laundering measures. Applicants must possess anti-money laundering measures prescribed by national anti-money laundering laws and regulations and submit corresponding acceptance materials during the application process.
(5) Payment business facilities. Applicants must submit technical safety inspection certification certificates for necessary payment business facilities during the application process.
(6) Creditworthiness requirements. Applicants and their senior executives and major investors must have good creditworthiness and submit corresponding criminal-free proof materials.
Considering the professionalism and security requirements of payment services, etc., applicants must also comply with regulations regarding organizational structure, internal control systems, risk control measures, business premises, etc. The People's Bank of China will detail specific requirements for anti-money laundering measures acceptance materials, technical safety inspection certification certificates, and criminal-free proof materials in the implementation rules of the Measures.
8. Question: What are the key steps in the approval process for the "Payment Business License"?
Answer: According to the provisions of the "Administrative Licensing Law of the People's Republic of China" and its implementation measures and the "Implementation Measures for Administrative Licensing of the People's Bank of China," the Measures stipulate that the approval process for the "Payment Business License" mainly includes:
(1) Applicants submit application materials to the local branch of the People's Bank of China. The branches of the People's Bank of China referred to in the Measures include the Shanghai Head Office of the People's Bank of China, various branches, business management departments, provincial capital (capital city) central branches, and sub-provincial city central branches.
(2) If the application meets the requirements, the branch of the People's Bank of China will accept it lawfully and submit the preliminary review opinion and application materials to the head office of the People's Bank of China.
(3) The head office of the People's Bank of China reviews the application materials based on the review opinions of various branches and feedback from social supervision. If the applicant is approved to become a payment institution, the head office of the People's Bank of China will lawfully issue the "Payment Business License" and make an announcement.
9. Question: What measures does the Measures specify to protect customer reserve funds?
Answer: Payment institutions can independently determine whether the payment services they engage in will accept customer reserve funds. Customer reserve funds refer to monetary funds voluntarily entrusted by customers to payment institutions and can only be used to handle payment services commissioned by customers.
The Measures make the following provisions regarding measures to protect customer reserve funds:
(1) Clarify the nature of reserve funds. Reserve funds accepted by payment institutions do not belong to the property of the payment institutions. Payment institutions can only transfer reserve funds based on payment instructions initiated by customers. Payment institutions are prohibited from misappropriating customer reserve funds in any form.
(2) Limit the holding forms of reserve funds. First, payment institutions must choose commercial banks as custodian banks for reserve funds and deposit accepted customer reserve funds in dedicated accounts. Second, payment institutions can only deposit customer reserve funds in dedicated accounts at the same commercial bank. Third, branches of payment institutions cannot independently open dedicated deposit accounts for reserve funds.
(3) Emphasize the collaborative supervision responsibility of commercial banks. As custodian banks for reserve funds, commercial banks should supervise the use of reserve funds deposited in their institutions and have the right to reject applications or instructions by payment institutions to use customer reserve funds in violation of regulations. When payment institutions adjust the positions of different dedicated deposit accounts for reserve funds, they must be reviewed by the legal entity institution of their custodian bank.
(4) Highlight the statutory supervisory responsibilities of the People's Bank of China. Payment institutions and custodian banks for reserve funds should separately report to the People's Bank of China custody agreements, the use of dedicated deposit accounts for reserve funds, and other relevant information materials. The People's Bank of China will lawfully conduct on-site inspections of dedicated deposit accounts for reserve funds and related accounts of payment institutions.
10. Question: How are false application behaviors handled?
Answer: The Measures emphasize that application behaviors must be true and credible. Depending on whether the application has been accepted or whether the applicant has already obtained the "Payment Business License," the Measures specify different handling methods for false application behaviors by applicants.
(1) If an applicant uses fraudulent or other improper means to apply for the "Payment Business License" but is not approved, the applicant and its shareholders holding more than 5% of its equity cannot reapply or participate in applying for the "Payment Business License" within three years.
(2) If an applicant uses fraudulent or other improper means to apply for the "Payment Business License" and has been approved, the People's Bank of China and its branches will order it to terminate payment businesses, cancel its "Payment Business License"; if suspected of a crime, it will be transferred to the public security organs for investigation; if constituting a crime, criminal responsibility will be pursued according to law; the applicant and its shareholders holding more than 5% of its equity cannot reapply or participate in applying for the "Payment Business License."
11. Question: What penalties will be imposed for unauthorized provision of payment services?
Answer: The Measures stipulate that any non-financial institution or individual providing or disguisedly providing payment services without the approval of the People's Bank of China, or continuing to provide payment services beyond the validity period of the "Payment Business License," will be ordered by the People's Bank of China and its branches to terminate payment services; if suspected of a crime, it will be transferred to the public security organs for investigation; if constituting a crime, criminal responsibility will be pursued according to law.
12. Question: What transitional arrangements and supporting measures will be implemented after the Measures take effect?
Answer: The Measures apply equally to non-financial institutions providing payment services within China, including non-financial institutions that have been providing payment services without approval before the implementation of the Measures and non-financial institutions planning to apply for payment services after the implementation of the Measures. The former can decide to exit the market or legally obtain the "Payment Business License" within one year after the implementation of the Measures. Non-financial institutions that fail to obtain the "Payment Business License" within the deadline shall not continue to provide payment services.
The People's Bank of China will quickly draft detailed implementation rules and related business methods for the Measures. The detailed implementation rules mainly detail and explain the qualification conditions of applicants, the content of relevant application materials, and the obligations of relevant responsible entities in the Measures. The related business methods