According to The Paper, in 2023, the payment industry ushered in its first administrative regulations, and a number of institutions, including the head payment company, received huge fines, and many institutions failed to renew their licenses in the five-year license renewal.
In the last month of 2023, the Regulations on the Supervision and Administration of Non-bank Payment Institutions (hereinafter referred to as the "Regulations") were officially promulgated, which will come into force on May 1, 2024, further bringing non-bank payment institutions and their business activities with an annual transaction volume of nearly 400 trillion yuan into the track of rule of law for supervision.
Compared with 2022, in 2023, the central bank and its branches will issue a significant increase in the amount of fines issued to payment institutions under its jurisdiction, with a total of 9 fines exceeding 10 million yuan.
In 2023, the central bank announced the renewal results of two batches of payment institutions, and many institutions lost their payment business licenses due to being suspended from review, failing to submit renewal applications, and voluntarily withdrawing within the validity period.
The payment business ushered in a new classification.
The "Regulations" officially promulgated in December 2023 will bring the full-chain and full-cycle supervision of the non-bank payment industry into the track of legalization and standardization to prevent payment risks, which is the first administrative regulation in the financial field issued after the first financial work conference.
Zhang Qingsong, deputy governor of the central bank, recently said that the "Regulations" provide a solid institutional guarantee for the future healthy development of the payment industry in the form of national legislation, and strive to create a stable, transparent, standardized and predictable business environment based on the rule of law, which is conducive to promoting the long-term standardized and healthy development of the payment service market.
In accordance with the principle of "license before license", the "Regulations" clarify the access conditions for the registered capital, major shareholders, actual controllers, senior executives and other members of payment institutions, and also implement license management for changes in major matters, and establish and improve the normalized exit mechanism for institutions with serious violations of laws and regulations.
At the same time, combined with years of regulatory practice, the Regulations adhere to the concept of functional supervision, starting from the essence of the business, according to whether the payer can receive the prepaid funds, divided into two categories: stored value account operation and payment transaction processing. The new classification method has good scalability, which is conducive to preventing regulatory gaps, and second, it is conducive to realizing "the same business, the same supervision" and promoting fair competition.
The central bank said that it is currently working on the formulation of the detailed rules for the implementation of the "Regulations", and the follow-up will be issued in accordance with the relevant provisions of the legislative process, fully soliciting and absorbing the opinions of all parties to ensure the smooth implementation of the "Regulations".
Huge fines are frequent, and the intensity is unprecedented.
In 2023, the regulatory authorities issued a total of 9 fines with an amount exceeding 10 million, of which 3 were issued by the head office of the People's Bank of China, and the rest were issued by the Shanghai Branch, Tianjin Branch, Guangdong Branch and Henan Branch of the Central Bank.
On the evening of July 7, the People's Bank of China issued huge fines to Alipay and Tenpay.
Among them, Alipay (China) Network Technology was warned for involving 7 types of illegal acts, and 83,091 illegal gains were confiscated414113 million yuan, a fine of 223115389033 million yuan;Tenpay Payment Technology was warned for 11 types of illegal acts, and 56,612 illegal gains were confiscated388789 million yuan, a fine of 242677827882 million yuan.
In 2023, the Shanghai branch of the central bank and the Tianjin branch each issued a fine of more than 80 million yuan.
Among them, on December 26, 2023, the administrative penalty decision issued by the Shanghai Branch of the People's Bank of China showed that Deshi shares *** were warned and confiscated illegal gains for violating merchant management regulations and liquidation management regulations242615373 million yuan, a fine of 8630503838 million yuan, and a total of 88.73 million yuan was confiscated.
At the end of October 2023, the administrative penalty information publicity table released by the Tianjin Branch of the People's Bank of China showed that Zhonghui Electronic Payment*** hereinafter referred to as "Zhonghui Payment") was warned and confiscated 1328 illegal gains for failing to handle the fund settlement of special merchants in accordance with the regulations, failing to implement the real-name management of the special merchants and failing to set up the settlement account of the acquiring bank in accordance with the regulations110,000 yuan, a fine of 6,762550,000 yuan, a total of 8090660,000 yuan.
In December 2023, Shanghai Huifu Payment*** received a fine from the head office of the People's Bank of China, involving 9 types of illegal acts, and confiscated 91 illegal gains502553 million yuan, a fine of 3172367323 million yuan.
In addition, Guangdong Huika Business Service*** hereinafter referred to as "Huika Business") was warned and confiscat 3305926 ed for violating the regulations on merchant management and payment account management24 yuan and a fine of 1852963120 yuan, the total amount of fines and confiscations is 2183555744 yuan.
The Henan branch of the Kaidianbao payment service *** was fined 19.84 million yuan in June 2023 for violating the management regulations of special merchants and trading with unidentified customers.
Shanghai Yinshengbao Electronic Payment Service *** was warned by the Shanghai Branch of the Central Bank for violating the merchant management regulations and the liquidation management regulations, and confiscated the illegal income 301896805 yuan, and imposed a fine of 1454204477 yuan, a total of 17561012 confiscation$82.
Guangdong Xinhui E-commerce Co., Ltd. was warned for violating the merchant management regulations and confiscated the illegal income 198665254 yuan and a fine of 993326270 yuan, the total amount of fines and confiscations is 1191991524 yuan.
A number of payment institutions have been suspended from reviewing their license renewals.
In 2023, the PBOC announced the results of the five-year license renewal of two batches of third-party payment institutions in January and July, respectively.
In the public information on the renewal of the "Payment Business License" of non-bank payment institutions released on January 5, 12 of the 18 payment institutions successfully renewed for 5 years, another 2 suspended the review, and 4 did not submit renewal applications.
Among them, Guangdong Huika Commerce and Zhonghui Electronic Payment, two payment companies that received huge fines in 2023, decided to suspend the review of their application for renewal of payment business licenses due to the circumstances stipulated in Article 24 of the Implementation Measures for Administrative Licensing of the People's Bank of China.
In addition, the supply and marketing of Zhongbai Payment, Chengdu Paytong New Information Technology Service, Jiangsu Dahehui Payment Business Service, Beijing Hengda Xinyuan Payment, did not submit an application for the renewal of the validity period of the "Payment Business License", and will not be renewed.
In the sixth batch of non-bank payment institutions' "Payment Business License" renewal publicity information released on July 5, 12 payment institutions successfully renewed for 5 years, 2 suspended the review, 2 did not submit renewal applications, and another 2 payment institutions have voluntarily withdrawn within the validity period.
Among them, due to the circumstances stipulated in Article 24 of the Measures for the Implementation of Administrative Licensing of the People's Bank of China, the central bank decided to suspend the review of the renewal application for the "Shengya Yunding Payment *** Pioneer Payment *** Payment Business License".
At the same time, Yunnan JETCO Payment Management *** Yulin Yuanheng Business Management Co., Ltd. did not submit an application for the renewal of the validity period of the "Payment Business License" and will not renew it. In addition, Xiamen Xiashang E-commerce *** Anhui Baijiahui Payment *** has taken the initiative to withdraw during the validity period of the "Payment Business License".