(Yicai) Aug. 25 -- The Payment and Clearing Association of China has released a convention setting out principles and requirements for agentic payment applications, guiding members to uphold compliance standards and fend off related risks.

PCAC members rolling out agentic payments, including institutions providing account management, transaction processing, and acquiring, switching, and clearing services, should establish a full-fledged regulatory framework spanning agent governance, user authorization, risk prevention and control, and consumer rights protection, according to the convention released yesterday.

Supervised by the People’s Bank of China, the PCAC is a self-regulatory social organization for the payment and clearing sector. Its members include clearing infrastructure operators, commercial banks, and all major licensed payment institutions.

The pact requires members to build a ‘know-your-agent’ mechanism based on the ‘know-your-customer’ principle, strengthen risk-control cooperation with agent developers and service providers, clarify authorization boundaries for agentic payments, sign well-defined liability allocation agreements with users, and conduct effective and rigorous verification of user identities and transaction intentions.

Moreover, members should implement a tiered and classified management regime, strengthen fund safety via measures, such as transaction limits, to develop agentic payment applications in a prudent manner, and enhance their technical security governance across algorithm and model safety, cybersecurity, data security, and tech ethics.

Core payment links involved in agentic payments, such as account management, transaction processing, and fund settlement and clearing, must be operated by specialized licensed institutions, according to a senior PCAC official.

Following the principle that payment service providers bear responsibility, PCAC members should assume primary accountability for users’ accounts, transactions, funds, and information security, the official noted.

Moreover, members should file records with the PCAC before formally launching applications featuring agentic payments, and mandatory business assessments and security testing should be conducted to earnestly fulfill primary responsibilities for safeguarding users’ funds, the official added.

The convention keeps technological innovation within a safe and controllable scope while providing clear operational guidance for market participants, said Wang Pengbo, chief financial analyst at Broadcom Consulting.

The development of agentic payment falls into three steps: agent-assisted payment, agent-initiated payment under preset conditions, and agent-initiated payment under generalized conditions. "The industry remains in its early stage, and most applications are still confined to auxiliary transaction scenarios," Wang noted.

Editors: Tang Shihua, Futura Costaglione