Marbridge Daily

China's Central Bank to Launch New Payment System in June

West China Metropolis Daily, 4/14/10

Su Ning, deputy director of the People's Bank of China, revealed that the bank's second-generation payment system will launch in late June. The first component of the system to begin operation will be its interconnected online banking application system; other applications systems and ACS systems are planned to go online by the end of June.

No third-party payment organizations are included among pilot participants for the next-generation banking system. The deputy director of a joint-stock bank in Chengdu said that only a dozen or so banks have been selected for the first round of trials, making it unsurprising that no third-party payment organizations were listed - another key reason being that third-party payment licenses have yet to be issued. The deputy director believes that the second-generation payment system was in part an upgrade targeted at third-party payment systems, meaning that Alipay and other third-party payment processors will not be excluded. The question of how benefits of the new system are to be allocated between banks and payment processors will be key to resolving disagreements between the two.

Wang Min, director of the Payment and Settlement office at the People's Bank of China, said at a recent press conference that the PBoC would support non-bank payment service organizations such as Alipay, provided that they met access requirements, and provide a public accounting platform.

Editor's Note: CEO Lucy Peng of Alipay said the company maintained a system under which it periodically reported to and communicated with the PBoC, and that Alipay fully supports all of the PBoC's regulations. Peng added that AliPay fully approves of the PBoC's decision to upgrade its existing online banking systems.

For more background on this topic, please see "Rumor: PBoC to Release Banking Platform in August" MD 4/02/10 issue.

Keywords: online payment Su Ning Internet online banking Alipay People's Bank of China third-party payment Lucy Peng Wang Min