Pursuant to the Law of the People's Republic of China on the People's Bank of China and other relevant laws and regulations, the People's Bank of China has formulated the Administrative Measures for the Payment Services Provided by Non-financial Institutions, which were adopted at the 7th governor's executive meeting on May 19, 2010, are hereby promulgated, and shall come into force on September 1, 2010.
Zhou Xiaochuan, Governor of the People’s Bank of China
June 14, 2010
Administrative Measures for the Payment Services Provided by Non-financial Institutions
Chapter I General Provisions
Article 1 To enhance the healthy development of the payment service market, regulate the payment services provided by non-financial institutions, prevent payment risks and protect the legitimate rights and interests of the parties concerned, these Measures are formulated pursuant to the Law of the People's Republic of China on the People's Bank of China and other relevant laws and regulations.
Article 2 The term “payment services provided by non-financial institutions” as mentioned in these Measures refers to some or all of the following monetary capital transfer services provided by non-financial institutions as the middlemen between payers and payees:
1. Payment through the network;
2. Issuance and acceptance of prepaid cards;
3. Bankcard acquiring; and
4. Other payment services as specified by the People's Bank of China (PBC).
The term “payment through the network” as mentioned in these Measures refers to the transfer of monetary funds between payers and payees via public or private networks, including currency exchange, internet payment, mobile phone payment, fixed phone payment, digital TV payment, etc.
The term “prepaid cards” as mentioned in these Measures refers to cards with prepaid values which are issued for making profits and are used for buying goods or services at institutions other than the issuer, including those issued in the form of cards or passwords by adopting such technologies as magnetic stripes or chips.
The term “bankcard acquiring” as mentioned in these Measures refers to the collection of monetary funds on behalf of the franchised merchants of bankcards via the POS terminals.
Article 3 To provide payment services, a non-financial institution shall obtain a Payment Business Permit under these Measures and become a payment institution.
Payment institutions shall be subject to the supervision and administration of the PBC.
No non-financial institution or individual may directly or indirectly engage in the payment business unless it has been so approved by the PBC.
Article 4 The transfer of monetary funds between payment institutions shall be handled at banking financial institutions. Payment institutions may not deposit monetary funds at each other to realize the transfer of monetary funds, or handle the transfer of monetary funds at other payment institutions.
No payment institution may handle the transfer of monetary funds between banking financial institutions, unless it is specially permitted to do so.
Article 5 Payment institutions shall follow the principles of safety, efficiency, honesty and fair competition, and may not damage the national interests, the public interests or the legitimate rights and interests of clients.
Article 6 Payment institutions shall abide by the anti-money laundering provisions and fulfill the anti-money laundering obligations.
Chapter II Application and Permit
Article 7 The PBC is responsible for the issuance and management of Payment Business Permits.
Applications for Payment Business Permits shall be examined by the local branches of the PBC and then submitted to the PBC for approval.
The term “branches of the PBC” as mentioned in these Measures refers to central sub-branches of the PBC at sub-provincial cities and branches above that level.
Article 8 An applicant for a Payment Business Permit shall meet the following requirements:
1. It is a limited liability company or joint-stock company legally formed inside the People's Republic of China and it is the corporate body of a non-financial institution;
2. Its registered capital has reached the minimum requirements of these Measures;
3. It has capital contributors that meet the requirements of these Measures;
4. It has at least 5 senior managers who are specialists in the payment business;
5. It has anti-money laundering measures which meet the prescribed requirements;
6. It has payment facilities;
7. It has a good organizational structure, sound internal control rules and effective risk control measures;
8. It has business sites and safety precautions which meet the prescribed requirements; and
9. Neither the applicant nor any of its senior managers has received any punishment for any violation or crime committed through the payment business or illegally providing payment services in the last three years.
Article 9 The minimum registered capital for an applicant that intends to operate the payment business countrywide is 100 million yuan, while that for an applicant that intends to operate the payment business in a province (autonomous region or municipality directly under the Central Government) is 30 million yuan. The minimum registered capital shall be paid-in monetary capital.
It shall be deemed as operating the payment business countrywide as mentioned in these Measures if an applicant forms a branch office in another province (autonomous region or municipality directly under the Central Government) to operate the payment business or if it makes it possible for its clients to handle the payment business in another province (autonomous region or municipality directly under the Central Government).
The PBC may adjust the minimum registered capital for applicants pursuant to the relevant laws, regulations and policies of the state.
The business scope of foreign-funded payment institutions, the eligibilities of overseas investors, the ratio of investments of overseas investors and other such matters shall be determined by the PBC in other initiatives and be submitted to the State Council for approval.
Article 10 The major investor of an applicant shall meet the following requirements:
1. It is a legally formed limited liability company or a joint-stock company;
2. By the date of application, it has provided information processing services for financial institutions for 2 or more years consecutively, or it has provided information processing services for e-commerce activities for two consecutive years or more;
3. By the date of application, it has been making profits for two consecutive years or more; and
4. It has no record of punishment for any violation or crime committed through the payment business or illegally providing payment services in the last three years.
The term “major investor” as mentioned in these Measures refers to an investor which actually controls the applicant or an investor which holds more than 10% of the applicant's equity.
Article 11 An applicant shall submit the following documents or materials to the local branch of the PBC:
1. A written application, which shall bear the applicant's name, domicile, registered capital and organizational setup, the payment business which the applicant applies for, etc.;
2. A photocopy of its business license (duplicate);
3. The bylaws;
4. A capital assessment certificate;
5. A financial accounting report which has been audited by an accounting firm;
6. A feasibility study report on the payment business;
7. Checking materials on anti-money laundering measures;
8. Technical safety testing certifications;
9. Resume of its senior managers;
10. Clean criminal records of the applicant and its senior managers;
11. Materials about the major investor; and
12. A declaration on the authenticity of the application materials.
Article 12 An applicant shall announce the following matters as required after receiving an acceptance notice:
1. Its registered capital and equity structure;
2. The list, proportions of equity and financial status of the major investors;
3. The payment business for which it applies;
4. Its business place; and
5. Safety certifications on its payment facilities.
Article 13 A branch of the PBC shall accept any application that meets the prescribed requirements, and submit its pre-examination opinion together with the application materials to the PBC. In the case of approval, the PBC shall issue a Payment Business Permit and make an announcement thereon.
A Payment Business Permit shall be valid for 5 years from the date of issuance. Where a payment institution intends to continue the payment business upon the expiration of its Payment Business Permit, it shall apply for renewal to the local branch of the PBC at least six months before the date of expiration. In the case of approval, each renewal shall be valid for 5 years.
Article 14 In case any of the following changes occurs, a payment institution shall submit it to the PBC for approval before applying to the registration organ for registering the change:
1. Change of company name, registered capital or form of organization;
2. Change of the major investor;
3. Merger or split; or
3. Change of the type of business or the coverage area of its business.
Article 15 To apply for terminating the payment business, a payment institution shall submit the following documents or materials to the local branch of the PBC:
1. A written applicant signed by the legal representative of the company, which shall bear the company name, the situations of the payment business, the payment business to be terminated, the termination reason, etc.;
2. A photocopy of its business license (duplicate);
3. A photocopy of its Payment Business Permit;
4. A plan for protecting the legitimate rights and interests of clients; and
5. An information processing plan for the payment business.
In the case of approval, the payment institution shall finish the termination work and surrender its Payment Business Permit according to the requirements in the reply of the PBC.
Article 16 Matters not mentioned in this Chapter regarding the licensing procedure shall be governed by the Measures for the Implementation of Administrative Licensing by the People's Bank of China (Order No.3 [2004] of the People's Bank of China).
Chapter III Supervision and Administration
Article 17 A payment institution shall carry out its business within the scope of business indicated in its Payment Business Permit, and may not undertake any business beyond that scope or outsource its payment business.
No payment institution may transfer, lease or lend its Payment Business Permit.
Article 18 A payment institution shall, in order to meet the requirements of prudential operations, formulate measures for the management of the payment business and for the protection of clients' rights and interests, set up risk control and internal control rules, and submit them to the local branch of the PBC for archival purposes.
Article 19 A payment institution shall determine the charging items and rates of its payment business and submit them to the local branch of the PBC for archival purposes.
A payment institution shall disclose the charging items and rates of its payment business to the general public.
Article 20 A payment institution shall file the statistical statements, financial accounting report and other relevant materials on its payment business with the local branch of the PBC as required.
Article 21 A payment institution shall make a payment service agreement, clarifying the rights and obligations of both parties, the principles for handling disputes, the liability for breach of contract, etc.
A payment institution shall disclose the standard clauses of its payment service agreement and submit them to the local branch of the PBC for archival purposes.
Article 22 Where a branch company of a payment institution is engaged in the payment business, both the branch company and the payment institution shall handle the archive-filing formalities at their respective local branches of the PBC.
Where a branch company of a payment institution terminates its payment business, the preceding paragraph shall apply by analogy.
Article 23 A payment institution shall, for the deposit paid by a client, issue an invoice for the amount of the payment service charges it collects instead of the amount of the client's deposit.
Article 24 Clients' deposits accepted by a payment institution shall not belong to the self-owned property of the payment institution.
A payment institution may only transfer clients' deposits based on clients' instructions. Payment institutions are forbidden to misappropriate clients' deposits in any form.
Article 25 A payment institution shall record the following information in a client's payment instruction:
1. Name of the payer;
2. Amount of payment;
3. Name of the payee;
4. Name of the payer's deposit bank or payment institution;
5. Name of the payee's deposit bank or payment institution; and
6. Date of instruction.
Where a client makes payment through a bank settlement account, the payment institution shall also record the number of the bank settlement account. Where a client makes payment through an account which is not a bank settlement account, the payment institution shall also record the name and number of the client's valid identity certificate.
Article 26 A payment institution which accepts clients' deposits shall open a special deposit account at a commercial bank and use it exclusively for clients' deposits, unless it is otherwise provided for by the PBC.
A payment institution can only choose one commercial bank to take custody of its clients' deposits and can only open one special reserve account at one branch of the commercial bank.
A payment institution shall conclude a deposit custody agreement with the corporate body of the commercial bank or any branch authorized by the commercial bank, clarifying the rights, obligations and responsibilities of both parties.
A payment institution shall file the deposit custody agreement and information about its special deposit account with the local branch of the PBC.
Article 27 A branch company of a payment institution may not open a special deposit account in its own name, but can only put the deposits it has accepted into the special deposit account opened by the payment institution.
Article 28 Where a payment institution adjusts the position of a special deposit account, the corporate body of the bank which takes custody of its deposits shall recheck the balance of the special deposit account to be adjusted, and notify the recheck result to the payment institution and the custodian bank.
A payment institution shall adjust the position of its special deposit account upon the strength of the recheck result issued by the corporate body of the custodian bank.
Article 29 A bank which takes custody of deposits shall oversee the use of clients' deposits under its custody, and file the information about the custody and use of clients' deposits with the local branch of the PBC and the corporate body of the custodian bank.
Where a payment institution makes an application for or gives an instruction on the use of clients' deposits which violates Article 25 through 28 of these Measures, the custodian bank of clients' deposits shall reject it. A custodian bank shall, if discovering the illegal use or any other unusual circumstances of clients' deposits, report it to the PBC branch at the locality of the custodian bank and the corporate body of the custodian bank.
Article 30 For a payment institution, the proportion of its paid-in monetary capital against its daily average balance of clients' deposits shall not be lower than 10%.
The term “daily average balance of clients' deposits” as mentioned in these Measures refers to a mean value calculated by the corporate body of the custodian bank based on the payment institution's total amount of clients' deposits at the end of each day within the last 90 days.
Article 31 A payment institution shall check the valid identity certificate or any other valid identity document of clients and register the clients' basic identity information as required.
Where a payment institution knows or should have known that a client intends to use its payment business for any illegal or criminal activity, it shall stop handling the payment business for the client.
Article 32 A payment institution shall have necessary technical means to guarantee the integrity, consistence and non-repudiation of payment instructions, the timely and accurate handling of payment transactions and the safety of the payment business. A payment institution shall also have the ability to resume processing in disaster and the ability to handle emergencies so as to guarantee the continuance of the payment business.
Article 33 Payment institutions shall keep clients' trade secrets, and may not disclose any, unless it is otherwise provided by any law or regulation.
Article 34 Payment institutions shall properly keep clients' basic identity information, payment transaction information, accounting documents and other relevant materials.
Article 35 Payment institutions shall accept the regular or irregular on-site or off-site inspections of the PBC and the branches thereof and truthfully provide the required materials, and may not refuse, impede or avoid inspection or falsely report, conceal or destroy any evidential material.
Article 36 The PBC and the branches thereof shall, pursuant to the relevant laws, administrative regulations and the PBC provisions, make regular or irregular on-site or off-site inspections on the corporate governance, business operations, internal control, risk status and anti-money laundering work of the payment institutions.
The PBC and the branches thereof shall follow the Provisions of the People's Bank of China on the Law Enforcement Inspection Procedures (Order No.1 [2010] of the PBC) when making on-site inspections on payment institutions.
Article 37 The PBC or the local branch thereof may take the following measures to make a spot inspection on a payment institution:
1. Make inquiries to the staff members of the payment institution and asking them to give explanations on matters under inspection;
2. Consulting and copying documents or materials related to matters under inspection, and sealing up documents or materials that could be transferred, concealed or destroyed;
3. Checking the payment institution's special deposit account for clients' deposits and other relevant accounts; and
4. Examining payment facilities and other relevant facilities.
Article 38 Where any payment institution falls under any of the following circumstances, the PBC or the local branch thereof has the right to order it to stop operating some or all of the payment business:
1. The total losses exceed 50% of the paid-in monetary capital accumulatively;
2. It has significant operating risks; or
3. It has any gross violation.
Article 39 Where any payment institution is terminated due to dissolution, cancellation or being declared bankrupt, its liquidation issues shall be handled under the relevant laws and regulations of the state.
Chapter IV Penalty Provisions
Article 40 Where any staff member of the PBC or any branch thereof falls under any of the following circumstances, he shall be given an administrative sanction; if any crime is constituted, he shall be subject to criminal liability:
1. Examining and approving any application for obtainment, change or termination of the Payment Business Permit in violation of the relevant provisions;
2. Inspecting any payment institution in violation of the relevant provisions;
3. Divulging any national secret or trade secret; or
4. Committing any other act of abusing powers or neglecting duties.
Article 41 Where a commercial bank falls under any of the following circumstances, the PBC or the local branch thereof shall order it to correct within a certain time limit and give it a warning or impose a fine of 10,000 yuan up to 30,000 yuan; if the circumstances are serious, the PBC shall order it to suspend or terminate its custody service of clients' deposits:
1. Failing to filing information about the custody or use of clients' deposits as required;
2. Failing to recheck any payment institution's adjustment of the position of its special deposit account as required; or
3. Failing to reject any payment institution's application for or instruction on the illegal use of clients' deposits as required.
Article 42 Where any payment institution falls under any of the following circumstances, the PBC branch shall order it to correct within a certain time limit and give it a warning or impose a fine of 10,000 yuan up to 30,000 yuan:
1. Failing to establishing the relevant systems, rules and risk control measures as required;
2. Failing to handle the relevant archive-filing formalities as required;
3. Failing to disclose the relevant matters as required;
4. Failing to file or retain the relevant materials as required;
5. Failing to handle the registration of changes as required;
6. Failing to issue invoices to clients; or
7. Failing to keep clients' trade secrets as required.
Article 43 Where any payment institution falls under any of the following circumstances, the PBC branch shall order it to correct within a certain time limit and impose a fine of 30,000 yuan; if the circumstances are serious, the PBC shall withdraw its Payment Business Permit; if it is suspected of being involved in any crime, the case shall be transferred to the public security organ for investigation; and if any crime is constituted, the liable party shall be subject to criminal liability:
1. Transferring, leasing or lending its Payment Business Permit;
2. Exceeding the approved scope of business or outsourcing services;
3. Failing to deposit or use clients' deposits as required;
4. Failing to maintain the prescribed proportion between paid-in monetary capital and clients' deposits;
5. Discontinuing or terminating the payment business without any legitimate reason;
6. Refusing or impeding the relevant inspection and supervision activities; or
7. Committing any other violation which endangers the stable operation of the payment institution, damages any client's legitimate rights and interests or imperils the payment service market.
Article 44 Where any payment institution fails to fulfill its anti-money laundering obligations as required, the PBC or the branch thereof shall punish it pursuant to the anti-money laundering laws and regulations of the state; if the circumstances are serious, the PBC shall write off its Payment Business Permit.
Article 45 Where any payment institution continues to operate the payment business after its Payment Business Permit has expired, the PBC or the branch thereof shall order it to terminate the payment business; if it is suspected of being involved in any crime, the case shall be transferred to the public security organ for investigation; and if any crime is constituted, the liable party shall be subject to criminal liability.
Article 46 Where any applicant applies for a Payment Business Permit by deception or any other illegitimate means, if the application is disapproved, neither the applicant nor any of its investors who hold 5% of equity in the applicant may apply or participate in the application for the Payment Business Permit again in the next three years.
Where any applicant applies for a Payment Business Permit by deception or any other illegitimate means, if the application is approved, the PBC or the branch thereof shall order it to terminate the payment business and write off its Payment Business Permit; if it is suspected of being involved in any crime, the case shall be transferred to the public security organ for investigation; if any crime is constituted, the liable party shall be subject to criminal liability; and neither the applicant nor any of its investors who hold 5% of equity in the applicant may apply or participate in the application for the Payment Business Permit again.
Article 47 Where any non-financial institution or individual directly or indirectly operates the payment business without the approval of the PBC, the PBC or the branch thereof shall order it to terminate its payment business and write off its Payment Business Permit; if it is suspected of being involved in any crime, the case shall be transferred to the public security organ for investigation; if any crime is constituted, the liable party shall be subject to criminal liability.
Chapter V Supplementary Provisions
Article 48 Any non-financial institution which has engaged in payment services before these Measures come into force shall apply for a Payment Business Permit within one year from the date when these Measures become effective. Otherwise, it may not continue the payment services.
Article 49 The right to interpret these Measures shall remain with the People's Bank of China.
Article 50 These Measures shall come into force on September 1, 2010.
