PBOC Paddles Alibaba and Tencent for Online Payment No-Nos

Yicai

2017-05-11

(Yicai Global) May 11 -- China’s central bank penalized the payment services arms of two Chinese internet juggernauts.

The People’s Bank of China (PBOC) fined both for violating payment business rules.

Alipay owned by Alibaba Group Holding Ltd. [NYSE:BABA]has been ordered to take corrective measures within a set period for its violations and was fined USD4,300 (CNY30,000), per an administrative penalty announcement from PBOC’s Shanghai branch yesterday.

Tenpay operated by Tencent Holdings Ltd. [HKG:0700] was also fined CNY30,000 for failing to implement the relevant rules of the Administrative Measures for Non-Bank Payment Institutions’ Online Payment Business, an administrative penalty from the central bank’s Shenzhen central sub-branch said that same day.

These are the first such sanctions imposed on the two online payment behemoths for regulatory violations.

These punishments might relate to these payment services’ failure to carry out real-name authentication of some accounts, the 21st Century Business Herald quoted insiders as saying. Neither firm has confirmed this, however.

Though the fines are trifling, the underscore the central bank’s intensified regulation of third-party payment services providers through more frequent fines, a third-party payment institution employee told the 21st Century Business Herald. PBOC has slapped fines on 47 payment companies thus far received, 01caijing.com data show.

Regulators -- including the central bank -- have increased efforts to guard against risks from and clean up third-party payment institutions since last year. Tough regulation will be the new normal in the payment sector for a future period, regulators said.

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