|3rd-party Payment Services to Get Boost|
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Shanghai is studying preferential policies to support the sustainable development of third-party payment services in the city.
The city has drafted a plan to shore up local third-party payment service providers and will seek opinions from them soon before unveiling the details, Shanghai Financial Services Office said on Nov.23.
The local financial, taxation and commerce departments will help Shanghai-based third-party payment providers to gain business licenses from the People's Bank of China through liaising with the central bank and providing business advice, the city's Financial Service Office told the local committee of the Chinese People's Political Consultative Conference.
However, some companies may have to close with more stringent requirements. The central bank is also encouraging mergers and acquisitions, and will boost cooperation with banks to reduce any financial risks that may be caused by the withdrawal of third-party payment providers. It is working on guidelines to manage the proper exit of payment providers.
In June, the central bank stipulated that all non-financial institutions must seek central approval by August 31, 2011, if they intend to run a third-party payment platform as it strengthens efforts to control risks in the sector.
The central bank said national third-party payment providers should have a registered capital of not less than 100 million yuan (US$14.6 million) while that for provincial service providers should not be less than 30 million yuan.
Of the 74 local companies applying for licenses as of September 17, 43 failed to meet the minimum registered capital requirement.
The opinions expressed do not constitute investment advice and specialist advice should be sought about your specific circumstances.
Published on our website on Nov.30, 2010