Thirteen third-party payment companies were approved by the People's Bank of China for payment business licenses. Shi Jing reports.
On Aug 31, just one day before the deadline set by the central bank last year. Along with the 27 other companies that have obtained a payment business license, the licensed third-party payment companies account for less than 25 percent of the 197 companies that applied for the license from the People’s Bank of China in the past 12 months.
Most of these newly licensed companies belong to China UnionPay, the Union Mobile Pay and the Shanghai UnionPay Merchant Services Co, Ltd. The Hangzhou-based Yintong Info Tech is also included in the list. Companies must have a registered capital of 30 million yuan ($4.7 million) and have been in operation for two years to receive a third-party payment network system safety certificate from the information technology security evaluation centers designated by the central bank.
Once they have the certificate, companies will be able to apply for public summons on the central bank’s official website. A payment business license will be offered to the companies once they have passed the public summons.
Seven of the 13 newly licensed companies have obtained the permit to issue and accept the operation of prepaid cards. Given that only eight companies of 27 were approved for the permit in May, the percentage has increased significantly.
While some newly licensed third-party payment companies, such as the Shanghai Days Holdings (Group) Co, Ltd are excited about getting the central bank’s permit, some leading prepaid card companies, such as the Shanghai-based SandPay E-commerce Service Co, Ltd and Bailian E-commerce Co, Ltd, are still waiting for the central bank’s approval.
The third-party payment companies belonging to the mobile communication giants China Telecom Corp Ltd, China Mobile Limited and China Unicom Limited were also not approved. But Chen Bing, vice-president of SandPay is still confident that his company will get the license in the next few months.
“The companies that have obtained the license this time applied for the permit from the central bank a long time ago. It can be inferred that the central bank will issue new licenses according to the time of application,” Chen said. He noted that the companies who were approved for the permit this latest time were not as large as expected. “It means that the license will be offered as long as the third-party payment company carries out all its business according to the government’s regulations,” Chen added.
But some prepaid card companies are making some adjustments. As a leading prepaid card company in Shanghai, Bailian E-commerce Co, Ltd has been issuing the popular Lianhua OK card for years. These cards currently can be used in more than 9,000 commercial outlets, amounting to some 900 million yuan. A customer service representative confirmed that Lianhua OK issued after Sept 1 can only be used in department stores belonging to the Bailian Group, instead of being used widely on other platforms such as Taobao.com. He said that cards issued before Sept 1, however, won’t be affected by the change.
“Changing the multifunctional cards into those with single use can be one option that third-party payment companies can seek, just in case the central bank comes out with a stricter policy and the company has no other way out,” said Zhang Meng, an analyst from the Beijing-based research company Analysys International.
Meanwhile, although Bailian has not received a payment service license so far, Shanghai Youth Daily said that the company has invested 100 million yuan and registered at the State Administration for Industry and Commerce a company which will specially do the third-party payment business for Bailian.
