To facilitate the implementation of the Administrative Measures for the Payment Services Provided by Non-financial Institutions (Order No.2 [2010] of the People's Bank of China), the People's Bank of China has formulated the Detailed Rules for the Implementation of the Administrative Measures for the Payment Services Provided by Non-financial Institutions, which are hereby issued for implementation.
The People's Bank of China
December 1, 2010
Detailed Rules for the Implementation of the Administrative Measures for the Payment Services Provided by Non-financial Institutions
Article 1 These Detailed Rules are formulated pursuant to the Administrative Measures for the Payment Services Provided by Non-financial Institutions (Order No.2 [2010] of the People's Bank of China, hereinafter referred to as the “Measures”) and other relevant laws and regulations.
Article 2 The “prepaid cards” as mentioned in the Measures shall not include:
1. Prepaid cards exclusively for paying social security money;
2. Prepaid cards exclusively for paying fares of public transport;
3. Prepaid cards exclusively for paying telephone charges and other communication fees; and
4. Prepaid cards whose issuer and merchant are the same corporate entity.
Article 3 The “at least 5 senior managers who are specialists in the payment business” as mentioned in item 4, Article 8 of the Measures shall mean that at least 5 of the applicant's senior managers shall meet the following conditions:
1. Having a university diploma at or above the undergraduate course level or a medium-grade technical title in the field of accounting, economy, finance, computer, electronic communication or information security; and
2. Having two or more years of experience in payment settlement or financial information processing, or having three or more years of experience in accounting, economy, finance, computer, electronic communication or information security.
The “senior managers” as mentioned in the preceding paragraph shall include the general manager, deputy general managers, chief financial officer and chief technical officer or persons who actually perform the duties thereof.
Article 4 The “anti-money laundering measures” as mentioned in item 5, Article 8 of the Measures shall include the internal control, client identification, reporting of suspicious transactions, retention of client identity information and transaction records, and other measures for preventing money laundering, terrorist financing and other financial crimes.
Article 5 The “payment facilities” as mentioned in item 6, Article 8 of the Measures shall include the processing system and network communication system of the payment business, as well as the computer rooms used exclusively for these systems.
Article 6 The “organizational structure” as mentioned in item 7, Article 8 of the Measures shall include departments with the functions of compliance management, risk management, capital management and system operation maintenance.
Article 7 The “information processing and support services” as mentioned in item 2, Article 10 of the Measures shall include information processing services and information processing support services.
Article 8 The “investor which actually controls the applicant” as mentioned in Article 10 of the Measures shall be:
1. An investor which directly holds more than 50% of the applicant's equity;
2. An investor which directly and indirectly holds more than 50% of the applicant's equity; or
3. An investor which directly and indirectly holds less than 50% of the applicant's equity but whose voting right is enough to have a significant impact on the resolutions of the shareholders' meeting or assembly.
Article 9 The “investor which holds more than 10% of the applicant's equity” as mentioned in Article 10 of the Measures shall be:
1. An investor which directly holds more than 10% of the applicant's equity; or
2. An investor which directly and indirectly holds more than 10% of the applicant's equity.
Article 10 The “written application” as mentioned in item 1, Article 11 of the Measures shall state the specific type of the intended payment business.
Article 11 The “photocopy of the business license (duplicate)” as mentioned in item 2, Article 11 of the Measures shall bear the applicant's official seal.
Article 12 The “financial accounting report” as mentioned in item 5, Article 11 of the Measures refers to the financial accounting report in the last year as of the date of application.
If it has not been one year since the formation of the applicant, the applicant shall submit a financial accounting report for the period of its continued existence.
Article 13 The “feasibility study report on the payment business” as mentioned in item 6, Article 11 of the Measures shall cover:
1. An analysis of the market future of the intended payment business;
2. Processing flows of the intended payment business, with a statement of the specific operations at all stages of the payment business from a client's initiation of a payment to the completion of a client's authorized payment, as well as the movement of related funds;
3. Technical means for realizing the intended payment business;
4. A risk analysis of the intended payment business and the control measures for it, with a separate statement for each stage of the payment business; and
5. An analysis of the economic benefits from the intended payment business.
To apply for payment businesses of different types, an applicant shall provide the above information separately by the type of the payment business.
Article 14 The “checking materials on anti-money laundering measures” as mentioned in item 7, Article 11 of the Measures refer to a report which contain:
1. Documents on the internal control rules against money laundering, which shall state the anti-money laundering compliance management framework, measures for the client identification and retention of client identity data, measures for reporting suspicious transactions, measures for retaining transaction records, anti-money laundering auditing and training measures, internal procedures for assisting in anti-money laundering investigations, and confidentiality measures against money laundering;
2. An explanation on the setting and functions of anti-money laundering positions, which shall state the internal anti-money laundering department, senior managers responsible for the anti-money laundering work, full-time anti-money laundering personnel and their contact methods; and
3. An explanation on the technical conditions for monitoring suspicious transactions.
Article 15 The “technical safety testing certifications” as mentioned in item 8, Article 11 of the Measures refer to documents and materials certifying that the payment facilities meet the business norms, technical standards and safety requirements of the People's Bank of China, including a testing report issued by a testing institution and a certification issued by a certification institution.
The “testing institution” and “certification institution” as mentioned in the preceding paragraph shall have been accredited by China National Accreditation Service for Conformity Assessment (CNAS) and meet the technical safety testing or certification requirements of the People's Bank of China.
If the technical safety testing or certification fails to meet the business norms, technical standards and safety requirements of the People's Bank of China or the technical safety testing or certification procedure or method has any significant defect, the People's Bank of China or its branch office may require the applicant to conduct testing or certification anew.
Article 16 The “resume” as mentioned in item 9, Article 11 of the Measures shall include the personal records, educational background and technical titles of senior managers, as well as the relevant certificates thereof.
Article 17 The “materials about the major investor” as mentioned in item 11, Article 11 of the Measures shall include:
1. An explanation of the applicant about the affiliation between investors;
2. A photocopy of the business license (duplicate) of the major investor;
3. A business cooperation certificate issued by the information processing and support service provider of the major investor, which shall state the contents of service and time of service and bear the official seal of the service provider;
4. The major investor's financial accounting reports of the last two years, which have been audited by an accounting firm; and
5. Certification materials proving that the major investor has not been punished for using the payment business to commit any illegal or criminal activity or handling the payment for any illegal or criminal activity in the last three years.
If the major investor is a financial institution, it shall also submit a photocopy of the relevant financial business permit and a certificate of approval of its investment in the payment institution.
Article 18 The “declaration on the authenticity of the application materials” as mentioned in item 12, Article 11 of the Measures refers to a written document issued by the applicant which declares to be liable for the authenticity, accuracy and integrity of the documents or materials submitted by it.
A declaration on the authenticity of the application materials shall bear the signature of the applicant's legal representative and the official seal of the applicant.
Article 19 The application documents or materials as required in Articles 11, 13, 14 and 15 of the Measures shall be written in Chinese and submitted in paper or electronic form (data disks) in triplicate.
Article 20 An applicant shall, within 10 days after receiving a notice of acceptance, announce the matters specified in Article 12 of the Measures on the website of the local office of the People's Bank of China for three consecutive days.
Article 21 The Payment Business Permit includes an original and a duplicate equally effective in law.
A payment institution shall display its Payment Business Permit (original) in a conspicuous position of its domicile. If it has an Internet website, it shall also publish the image information of its Payment Business Permit (original) in a conspicuous position of the homepage of the website.
Article 22 To apply for a renewal of its Payment Business Permit, a payment institution shall submit the following documents and materials:
1. A written application signed by the legal representative of the company, stating the name of company, the payment business operation status and the reasons for renewal;
2. A photocopy of its business license (duplicate); and
3. A photocopy of its Payment Business Permit (duplicate).
A payment institution shall not apply for modifying other matters while applying for renewing its Payment Business Permit.
Article 23 The People's Bank of China shall make a decision on approval or disapproval of a payment institution's application for renewal of its Payment Business Permit after fully examining and comprehensively evaluating the operation status of the institution.
In the case of approval, the payment institution shall surrender the original permit and obtain a new one.
Article 24 Where a payment institution's Payment Business Permit is lost or destroyed for a force majeure during the valid period, the payment institution shall, within 10 days after verifying the fact, make an announcement on a national newspaper designated by the People's Bank of China and a local newspaper designated by the local office of the People's Bank of China for three consecutive days to nullify the original permit.
Article 25 A payment institution shall, within 10 days after finishing announcing its lost or destroyed Payment Business Permit, obtain a new one at the local office of the People's Bank of China upon the strength of the published announcement.
The People's Bank of China shall issue a new Payment Business Permit to the payment institution upon examination.
Article 26 Where a payment institution's Payment Business Permit (duplicate) is lost or destroyed during the valid period, Articles 24 and 25 of these Detailed Rules shall apply analogically.
Article 27 To modify any matter listed in Article 14 of the Measures, a payment institution shall submit a written application signed by its legal representative to the local office of the People's Bank of China, stating the name of company, the matter to be modified and the reasons for modification.
Article 28 The “plan for protecting the legitimate rights and interests of clients” as mentioned in item 4, Article 15 of the Measures shall contain:
1. Measures for protecting clients' right to know: expressly informing a client of the reasons for terminating the payment, time when it stops accepting a client's payment authorization, and follow-up arrangements for the payment to be terminated;
2. Measures for protecting clients' privacy: specifying the recipient institution, hand-over process, method of destruction and supervision arrangements of client identity information; and
3. Measures for protecting clients' right of choice: specifying at least two optional plans on returning payment deposits to clients.
Where a plan for protecting the legitimate rights and interests of clients involves any other payment institution, certifications on the client identity information transfer agreement and the arrangements on returning payment deposits to clients made with such other payment institution shall also be submitted.
Article 29 The “information processing plan for the payment business” as mentioned in item 5, Article 15 of the Measures shall state the recipient institution, hand-over process, method of destruction and supervision arrangements of payment business information.
Where the plan involves any other payment institution, certifications on the payment business information transfer agreement made with such other payment institution shall also be submitted.
Article 30 A payment institution shall determine the charge items and rates of its payment business pursuant to the relevant provisions of laws, regulations and departmental rules. If laws, regulations and departmental rules are silent about the charge items and rates of its payment business, a payment institution may reasonably determine the charge items and rates of its payment business under the market principle.
A payment institution shall disclose the charge items and rates of its payment business in a conspicuous position of its business premises. A payment institution which has an Internet website shall also disclose them on the homepage of its website.
Where a payment institution adjusts the charge items or rates of its payment business, it shall publish the adjustment according to the provision of the preceding paragraph for 30 consecutive days before implementing the new charge items or rates.
Article 31 A payment institution shall, within 4 months after the end of each accounting year, file its financial accounting report of the last accounting year audited by an accounting firm with the local office of the People's Bank of China.
Article 32 The “payment service agreement” as mentioned in Article 21 of the Measures shall be a contract in paper or electronic form which meets the requirements of laws and regulations and is available for reference in case of investigation.
A payment institution shall disclose the standard clauses of its payment service agreement in a conspicuous position of its business premises. A payment institution which has an Internet website shall also disclose them on the homepage of its website.
Article 33 The standard clauses of a payment institution's payment service agreement shall, under the principle of fairness, fully and correctly define the rights, obligations and responsibilities between the payment institution and a client.
A payment institution shall remind a client of any standard clause of the payment service agreement which exempts the payment institution from any liability or limits any liability of the payment institution, and explain it to the client.
To adjust the standard clauses of its payment service agreement, a payment institution shall notify a client of the adjustment at least 30 days in advance. Otherwise, the adjustment shall not be binding on the client.
Article 34 Where a branch company of a payment institution is engaged in the payment business as mentioned in Article 22 of the Measures, the following documents and materials shall be submitted for archival purposes:
1. A written report signed by the legal representative of the company;
2. A photocopy of the Payment Business Permit (duplicate); and
3. A photocopy of the business license of the branch company (duplicate).
The above documents and materials shall be submitted in paper form in duplicate by the payment institution and the branch company to the local offices of the People's Bank of China respectively.
If necessary for its business, a payment institution may apply for a Payment Business Permit (duplicate) for a branch company which has gone through the archival formalities. The branch company shall display the Payment Business Permit (duplicate) in a conspicuous position of its domicile.
Article 35 Where a branch company of a payment institution terminates its payment business as mentioned in Article 22 of the Measures, the following documents and materials shall be submitted for archival purposes:
1. A written report signed by the legal representative of the company;
2. A photocopy of the Payment Business Permit (duplicate);
3. A photocopy of the business license of the branch company (duplicate);
4. A plan for protecting the legitimate rights and interests of clients; and
5. Other materials as required by the People's Bank of China.
The plan for protecting the legitimate rights and interests of clients as mentioned in item 4 of the preceding paragraph shall be governed analogically by Article 28 of these Detailed Rules.
The above documents and materials shall be submitted in paper form in duplicate by the payment institution and the branch company to the local offices of the People's Bank of China respectively.
The branch company of a payment institution shall surrender its Payment Business Permit (duplicate) when handling the archival formalities.
Article 36 The “ability to resume processing in disaster” as mentioned in Article 32 of the Measures means that a payment institution shall resume its payment business within 24 hours after its payment business is interrupted, at least meeting the following requirements:
1. Having rules on emergency response and disaster recovery;
2. Having a reliable emergency response plan and rehearsal plan;
3. Having necessary disaster recovery personnel and business premises for use in case of emergency; and
4. Having data backup facilities in the same machine room and application-level backup facilities in the same city.
Article 37 Where a payment institution's payment business has been interrupted for more than 2 hours due to an accident, it shall immediately report the relevant information to the local office of the People's Bank of China, and within 3 workdays, file a written report on the cause and impact of the accident and the remedial measures.
Where the same occurs to a branch company of a payment institution, the payment institution and the branch company shall report to the local offices of the People's Bank of China according to the provision of the preceding paragraph analogically.
Article 38 Payment institutions shall take necessary management measures and technical measures to prevent the loss, destruction or leakage of client identity information and payment business information.
A payment institution shall not provide client identity information and payment business information to others in any form, except as otherwise provided for by laws and regulations.
Article 39 A payment institution shall retain the identity information and payment business information about a client for at least 5 years from the year when their business relationship ends.
Client identity information and payment business information involved in a suspicious transaction or illegal or criminal activity under investigation by the judicial authority shall be retained by the payment institution until the end of the related investigation if the investigation is still open at the expiry of the minimum period of retention as mentioned in the preceding paragraph.
Article 40 The relevant provisions of the Measures for the Management of Accounting Archives (No.32 [1998] of the Ministry of Finance) shall apply to the period of retention of accounting archives of payment institutions.
Article 41 The “gross violation” as mentioned in Article 38 of the Measures means that:
1. A senior manager of a payment institution knowingly handles the payment business for any illegal or criminal activity of any other person; or
2. The personnel of a payment institution knowingly handle the payment business for illegal and criminal activities many times.
Article 42 These Detailed Rules shall come into force on the date of promulgation.
