PBoC online payment rule won't impact industry - analyst
Shanghai. June 22. INTERFAX-CHINA - People's Bank of China's (PBoC) new online payment regulations, which mandates licenses for online and mobile payment service providers, is unlikely to impact the industry, an analyst told Interfax on June 22.
The regulations issued yesterday require all online and mobile payment service providers to apply for licenses before the regulation takes effect on September 1. The law regulates non-bank payment service providers.
Only companies with a registered capital of at least 30 million ($4.41 million) are eligible for the license, and service providers with national coverage must have a registered capital of at least RMB 100 million ($14.69 million), the regulation stated.
All other non-bank online payment businesses will be ordered to terminate operations.
The new rules will have limited impact on the industry as the top players are already eligble for licenses, Cao Fei, a senior industry analyst with Analysys International told Interfax.
"Online payments make up the majority of payments made outside of banks. Since the top online payment service providers are already eligible for licenses the new rule will have limited impact on the status quo," said Cao.
The top nine online payment companies accounted for 98.1 percent of the market as of the first quarter of 2010.
Alibaba's online payment subsidiary Alipay.com Co. Ltd. took up around 51 percent of market share, while Tencent's Tenpay was the next biggest player at 25.2 percent.
China's combined online and mobile payment market generated RMB 208.2 billion ($30.56 billion) in total revenue in the first quarter of 2010, with online payments taking up RMB 199.9 billion ($29.35 billion) of that sum, an increase of 13 percent quarter-on-quarter, according to Analysys International.