PBOC Issues Latest Batch of Third-Party Payment Service Licenses
Jul. 16 – China’s central bank, the People’s Bank of China (PBOC), has granted a new batch of payment service licenses by way of a decree entitled “Measures for the Administration of Payment Services of Non-Financial Institutions” (PBOC Order  No. 2) to 27 additional companies, which includes affiliates of both the Sina Corporation and Baidu, Inc. Sina is known for its online Weibo platform (which functions as a micro-blog similar to Twitter), while Baidu is the most popular search engine in China.
PBOC Order No. 2 stipulates that a non-financial institution that intends to provide payment services must obtain a payment service license in order to be recognized and function as a payment institution. Payment services refer to accepting online payments, issuing and accepting prepaid cards, collecting bills via bank cards and any other types of payment-related services as determined by the PBOC.
PBOC Order No. 2 also states that eligible applicants must have a minimum registered capital of RMB 100 million to be able to provide payment services at the national level, or RMB 30 million to be able to provide payment services at the provincial level.
The PBOC first started granting payment licenses in May 2011. Other internet-based companies that have already been granted licenses include Alipay, TenPay, ShengPay, SNDA and NetEase.
Alibaba’s Alipay currently dominates China’s online payment service market.
Up until now, the PBOC had granted a total of 7 batches of payment licenses involving 250 Chinese enterprises.
Furthermore, according to China Daily, two of the 27 total companies that were granted licenses were foreign-invested companies: Edenred China and Sodexo Pass China (Shanghai). They are the first foreign-invested enterprises to receive such a license. World-renowned online payment service provider Paypal has yet to be granted a license.
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