Non-bank payment institutions will be required to report to the central bank any consumer transactions exceeding 50,000 yuan and cross-border transfers over 200,000 yuan.
New rules from the PBOC (People’s Bank of China) have come into effect from 1 January 2019 for non-bank payment institutions, including Alipay and WeChat Pay, requiring them to report large or suspicious transactions to the central bank within five days from their occurrence.
Payment firms are required to set up internal control and monitoring systems to effectively verify client identities, monitor for terrorist organisations and activities, properly store client data and transaction records, and report large-value and suspicious transactions.
They will need to report on the following transactions occurring in the same day, whether in a single or cumulative transaction:
- cash receipts and expenditures over CNY 50,000 or the equivalent of USD 10,000;
- cross-border transfers of CNY 200,000 or the equivalent of USD 10,000;
- domestic transfers over CNY 500,000 or the equivalent of USD 100,000; and
- money transfers from non-natural persons (e.g. corporates) of over CNY 2 million of the equivalent of USD 200,000.
Individuals found to have exceeded these limits will be subject to the PBOC’s monitoring and management, as the central bank seeks to enhance safeguards against money laundering and illegal financing.
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Payment firms will also need to pay attention to the timing and frequency of transactions and report suspicious activity to the central bank.
In addition, new e-commerce rules also effective from 1 January cover the registration and licensing of e-commerce operators, taxation, dispute resolution and intellectual property protections.
The rules will help clean up China’s reputation a major source of counterfeit merchandise, while also addressing other issues in the country’s e-commerce landscape, including false advertising, consumer protection, data protection and cybersecurity, according to Deacon’s, cited in an SCMP report.
The report said the new requirements will put smaller e-commerce operators with fewer resources at a disadvantage and potentially hinder their growth.