China’s Central Bank has penalized 1,436 banks and payment companies and levied fines totaling 1.13 billion yuan — or $176 million — since 2016, the bank’s deputy governor said at the recent China Payment and Clearing Forum.
As the website Pandaily reported on Monday (Oct. 11), Fan Yifei, the People’s Bank of China’s deputy governor, also noted that the bank has helped 22 payment institutions withdraw from the market voluntarily, refused to renew another 17 and revoked the business licenses of two more due to serious regulatory infractions.
China’s payment business license was established in 2010 and has spent the last 11 years scaling rapidly, to the point that the country now has the world’s leading non-bank payment market. But with that speed has come chaos, the Pandaily story noted — whether that means businesses conducting payment operations without permission or even outright illegal activity, from misappropriation of customers’ funds to money laundering.
Meanwhile, the People’s Bank of China has helped investigate more than 5,700 gambling cases and has frozen more than 19.4 billion yuan since 2020. Suspicious gambling-related transactions have dropped by more than 50% since the start of 2020. The bank has also imposed financial punishments on 52,000 institutions and individuals for illegally selling or purchasing accounts.
In an effort to deal with problems within platform enterprises conducting payments and other financial services, the bank has asked those platforms to implement rectification requirements. That has led to an increase in the pace of interconnection in the payment field.
Also at the forum, Yifei said the People’s Bank wants to “deepen” its mobile payments-focused antitrust probes, even though it has marked “interim progress” over the past year.
As PYMNTS noted last month, the move is part of China’s ongoing efforts to curb the power of Big Tech in the country and reduce the risk of those companies gaining traction.
“The antitrust actions in the payment sector need to deepen,” Yifei told the forum. “The central bank will persistently urge platform companies to rectify their payment businesses.”