On October 26,the People’s Bank of China issued the Guidance on E-payments (Number 1)(The People’s Bank of China Announcement [2005]23, hereinafter referred to asthe Guidance) which put forward the guiding requirements on banks’e-paymentactivities. The Guidance takes effect from date of issuance.
In recentyears, China’s e-payment has developedrather rapidly, featuring a continuous emergence of new types of e-paymenttools as well as rise of trading volume via e-payment. E-payment has graduallybecome one of the important components of the retail payment system in China. Therefore, it isurgently required to standardize e-payment in terms of business rules, conductcriteria, transaction identification mode, risk control, rights andresponsibilities of all the participating parties concerned, and etc. Puttingthe Guidance into effect is conducive to standardizing e-payment activities,and promoting healthy and orderly development of electronic banking business aswell as e-commerce; conducive to clarifying the rights and responsibilities ofall the participating parties involved in e-payment and ensuring the safety ofbanks’ and customers’ funds and fending off payment risks; conducive topromoting the innovation of payment tools and enhancing payment servicequality; conducive to preventing and cracking down on money-laundering andother financial activities in violation of laws.
The Guidanceis organized into 6 chapters and 49 articles. On the precondition of advocatingthe principle of efficiency and safety, the Guidance focuses on the adjustmentof the rights and responsibilities relationship between banks and customers ine-payment activities, with the business process of e-payment being the mainthread. The Guidance mainly includes 5 aspects: first, it defines the concept,types and business modes of e-payment; second, it stipulates the requirementsand procedures for the application of e-payment; third, it standardizes theinitiation and receipt of instructions of e-payment; forth, it emphasizes theaversion and control of risks inherent in e-payment; fifth, it clarifies theprinciples and requirements targeted at handling errors arising from e-paymentbusinesses.
The issuanceof the Guidance symbolizes the new progress made by the PBC in terms of establishinge-payment rules. Related rules will be gradually formulated and improved. Dueto the complication involved in e-payment tools and e-payment modes, thediversity of participating agents and the rapidness of innovation, the PBC willput forward a series of related “guidance” on e-payment businesses of differentcharacteristics, modes and participating agents. This process will be achievedin accordance with the regulating requirements for e-payment’s differentdeveloping phases so as to gradually establish and improve the business rulesfor e-payment businesses and carry out relatively comprehensive guidance one-payment.
