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3rd-Parties Excluded in China's New Payment System

Sohu IT, 5/10/10

Ouyang Weimin, director-general of the payment system department of the People's Bank of China (PBoC), recently said that ongoing market rumors of a "super online bank" are false, and that the PBoC's launch of its second-generation online payment system will have no great impact on third-party payment platforms.

Ouyang said that the PBoC provides interbank payment and transaction services, and that the interbank "online bank" is in reality a new interbank transaction service, not a "super online bank." Ouyang said that the PBoC would not forcibly require every bank to adhere to a single online banking standard to achieve interoperability.

Ouyang added that third-party payment platforms merely offer a handful of services that are generally not the concern of traditional banks. Last year, approximately RMB 500 bln in third-party payments were made, small compared to the RMB 1,200 trln combined accounts of the traditional banking system. The PBoC has neither the interest nor the capability to provide third-party payment functionality, nor has it plans to develop this business. Likewise, third-party payment platforms will not be brought on board the PBoC's second-generation payment system.

Regarding the development of third-party payment platforms such as Alipay, Ouyang said that third-party platforms are filling a gap in the payments system, utilizing online resources to facilitate communication between banks and customers. The PBoC maintains an open policy towards third-party payment firms in accordance with international finance principles, and is actively supporting the industry's development.

Keywords: Internet online banking Alipay People's Bank of China third-party payment online payment Ouyang Weimin e-payment


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