Decree of the People´s Bank of China
No.2 (2010)
According
to the Law on the People´s Bank of China of the People´s Republic of China
and other governing laws and regulations, the People´s Bank of China (referred
to as the PBC hereinafter) formulated Administrative Measures on Payment
Services Provided by Non-financial Institutions, which was approved by the
7th meeting of the PBC governor´s office convened on May 19, 2010. The Measures will be
effective since September 1, 2010.
Governor Zhou Xiaochuan
June 14, 2010
Administrative Measures on Payment
Services Provided by Non-financial Institutions
Chapter I General Provisions
Article 1 This Measure is promulgated
according to the Law on the People´s Bank of China of the People´s Republic
of China in order to promote healthy development of the payment market and
standardize the payment services provided by non-financial institutions,
prevent payment risks and protect legitimate rights and interests of relevant
parties.
Article 2 Payment services provided
by non-financial institutions refer to money transfer provided in any of the
following forms by non-financial institutions between a payer and a payee:
(1)On-line payment;
(2)Issuance and acceptance of prepaid
cards;
(3)Acquisition of bankcards;
(4)Other payment services as identified by
the PBC.
On-line payment refers to fund transfer
on public or special networks, including remittance, Internet payment, mobile
phone payment, fixed-line payment and payment via digital TV network and etc.
Prepaid cards refer to cards or pins
issued with value stored using technologies such as magnetic stripes and chips
which can be used to purchase goods and services provided not by the card
issuer with the purpose of gaining profits.
Bankcard acquisition refers to an
acquirer's acceptance of funds on behalf of licensed merchants that accept
bankcard payment via payment terminals such as POS machines.
Article 3 In order to provide payment
services, a non-financial institution should obtain a Payment Business License
in accordance with this Measure to become a payment institution.
Payment institutions are under
supervision and regulation of the PBC.
Without approval of the PBC, any
non-financial institution or individual shall not engage in payment businesses
in any forms, explicit or disguised.
Article 4 A payment institution shall
entrust a banking financial institution to transfer funds with another payment
institution and shall not transfer money with another payment institution by
way of mutual deposit of such funds, nor entrust a third payment institution to
conduct such transfer.
Payment institutions shall not provide
fund transfer services for banking financial institutions unless otherwise
permitted.
Article 5 Payment institutions
shall observe the principle of secure, efficient and good-faith operation and
fair competition and shall not undermine national interests, public interests
of the society and legitimate rights and interests of customers.
Article 6 Payment institutions shall
abide by AML laws and regulations and fulfill AML obligations.
Chapter II Application and
Licensing
Article 7 The PBC is in charge of
the issuance and management of the Payment Business License (referred to
as the License hereinafter).
A License application shall be
first reviewed by the local branch office of the PBC and then submitted to the
PBC headquarters for approval.
The branch office of the PBC in this Measure
refers to branches in cities of sub-provincial level and above.
Article 8 A License applicant
shall meet the following requirements:
(1)
The
applicant shall be a limited liabilities company or a limited company
lawfully incorporated within the jurisdiction of the People´s Republic of
China and should be a
non-financial institution with legal person status;
(2)
The
applicant shall meet the threshold for registered capital as provided for in
this Measure;
(3)
Investors
of the applicant shall meet requirements as provided for in this Measure;
(4)
At least
five members of the senior management of the applicant should know payment
businesses well;
(5)
The
applicant shall take adequate anti-money laundering measures as required;
(6)
The
applicant shall have qualified equipments for payment businesses;
(7)
The
applicant shall have sound organizational structure and internal control system
and take adequate risk management measures;
(8)
The
applicant shall have operation premises and take security measures in line with
relevant requirements;
(9)
The applicant
and its senior management have not been penalized for irregularities or crimes
by taking advantage of operation in payment businesses, or for providing
payment services for criminal or illegal conducts in the recent 3 years.
Article 9 To apply to operate
payment businesses nationwide, a payment institution shall have a minimum of
100 million yuan as registered capital; to apply to operate payment
businesses within a province (autonomous region or municipality), a payment
institution shall have a minimum of 30 million yuan as registered capital. The
minimum registered capital should be paid-in capital.
The operation of payment businesses
nationwide refers to the applicant applying to open branch(es) to operate payment
businesses in another province (autonomous region or municipality) or to enable
clients to make cross-provincial payment.
The PBC may adjust the registered
capital threshold for applicants according to relevant laws, regulations and
policies.
The PBC will release separate
provisions on the scope of business of foreign-invested payment institutions,
qualifications of foreign investors and requirements on the share of investment
by foreign investors in another document and submit it for the approval of the
State Council.
Article 10 Major investor(s)
of an applicant should meet the following requirements:
(1)
The
major investor of a payment institution shall be a lawfully incorporated limited
liabilities company or limited company;
(2)
The
major investor should have provided services to support information processing by
financial institutions or for e-business activities for at least two
consecutive years by the date of application;
(3)
The
major investor should have made profits for at least two consecutive years by
the date of application;
(4)
The
major investor has not been penalized for irregularities or crimes by taking
advantage of operation in payment businesses, or for providing payment services
for criminal or illegal conducts in the recent 3 years;
Major investor in this Measure
refers to investor(s) holding controlling shares of the applying institution
and investors holding more than 10 percent of the shares of the applying
institution.
Article 11 An applicant shall provide the
following documents and materials to local branch office of the PBC:
(1)
An
written application stating the name, premise, registered capital,
organizational structure of the applicant and specific payment business to be
operated;
(2)
Photocopy
of the business license (duplicate) of the company;
(3)
Articles
of association of the company;
(4)
Capital
verification report;
(5)
Financial
statements audited by auditing agencies;
(6)
Feasibility
reports of the payment businesses to be operated;
(7)
Materials
verifying the adequacy of anti-money laundering measures taken by the
applicant;
(8)
Certificate
of technological security;
(9)
Biographical
statements of senior management;
(10)
Materials
authenticating that the applicant and the senior management have no criminal
records;
(11)
Relevant
materials of major investors;
(12)
Statements
ensuring the authenticity of application materials.
Article 12 The applicant shall publicly disclose
the following information after receiving the PBC´s notice of accepting the
application for examination:
(1)
Registered
capital and equity structure of the applicant;
(2)
Name
list of, the ratio of shares held by major investors and financial situation of
major investors;
(3)
The specific
payment businesses the applicant intends to operate;
(4)
Operation
premise of the applicant;
(5)
Certificate
affirming technological security of the equipment of payment businesses.
Article 13 Branch offices of the PBC shall
accept the applications that have met the requirements and forward the results
of preliminary examination and the application materials to the PBC headquarters.
Where the application is approved after examination, the PBC will issue the
applicant with a Payment Business License and notify such
issuance.
The License is valid for 5 years
since the date of issuance. Where the payment institution continues the payment
business after the expiry of the License, the payment institution shall
apply to renew the License to local branch office of the PBC within 6
months before its expiry. As approved by the PBC, the renewed License is
valid for 5 years.
Article 14 When that the payment
institution alters one of the following items, the payment institution shall get
the approval of the PBC before filing an application for alteration at the
registration agency of the company:
(1)
Name,
registered capital or organizational structure;
(2)
Major
investors;
(3)
Merge or
separation;
(4)
Adjustment
in the types or scope of business;
Article 15 A payment institution shall
provide the following documents and materials to the local branch office of the
PBC to apply for termination of its operation of payment businesses.
(1)
A
written application signed by the legal representative of the company with the
name of the company, conducts of payment businesses, specific payment business
to be terminated and the reasons for termination;
(2)
Photocopy
of business license (duplicate) of the company;
(3)
Photocopy
of the License;
(4)
Plan to
protect legitimate rights and interests of clients;
(5)
Plan on
how to dispose of the information of payment businesses.
Where approved, the payment institution
shall complete the termination procedures as officially replied by the PBC and
return the License.
Article 16 The items that have not been covered
in this Chapter are subject to the Implementation Measures of Administrative
Licensing of the People´s Bank of China (PBC Decree No. 3 [2004]).
Chapter 3 Supervision and Regulation
Article 17 The payment institution shall
not be engaged in businesses beyond the scope as examined and approved in the License
and shall not outsource its businesses to others.
The payment institution must not
transfer, lease or loan out its License
.
Article 18 A payment institution shall
formulate measures on operating payment businesses and measures to guarantee the
legitimate rights and interests of clients, and establish and improve the systems
on risk management and internal control in line with prudential operation
requirements. The measures mentioned above shall be filed with the local branch
office of the PBC once taken.
Article 19 A payment institution shall
define the charging items and charging standards for payment services it
provides, which shall be filed with local branch office of the PBC.
A payment institution shall publicly
disclose the charging items and charging standards of the payment services it
provides.
Article 20 A payment institution should
submit statistical statement, financial statement and other documents as required
to the local branch office of the PBC.
Article 21 A payment institution
should formulate a payment service agreement to identify the rights and
interests, principles of dispute settlement, default liabilities and other
relevant items of the payment institution and its customers.
A payment institution should disclose
the standard terms of the agreement on payment services and file the agreement
with the local branch office of the PBC for record.
Article 22 Where the subsidiary of a payment
institution is in the payment business, both the payment institution and its
subsidiary shall file with the local PBC office for disclosure purpose.
When the subsidiary of a payment institution
terminates its payment business, they should go through the same procedure.
Article 23 When a payment institution
accepts reserves from its client, it can only invoice the client for the
service fee charged, not the amount of reserves.
Article 24 A payment institution does
not have ownership over the reserves.
A payment institution can only transfer
the reserves according to the client´s payment instruction and must not divert
the reserve money for any other purpose.
Article 25 A payment
institution shall record the following in the client´s payment instruction:
Name of the payer;
The specified amount;
Name of the payee;
Name of the payer´s bank or payment
institution;
Name of the payee´s bank or payment
institution;
Date on which the payment instruction
is given.
Where a client makes a payment from a bank
payment account, the payment institution shall record the account number. Where
a client makes a payment from a non-bank payment account, the payment
institution shall record the name and number of the client´s valid identity
document.
Article 26 Where a payment institution
accepts clients´ reserves, it shall open a designated reserve account with a
commercial bank to deposit the reserves, except where there are other
requirements by the PBC.
A payment agency can only choose one
commercial bank to deposit the reserves, and can only open one designated
reserve account in any one of the branch offices of the commercial bank.
The payment agency shall sign with the headquarters
of the commercial bank or its authorized branch offices a reserve deposit agreement
to clearly define the rights, obligations and responsibilities of the two
sides.
The payment agency shall file with the
local PBC offices the reserves deposit agreement and the detailed information
of designated reserve account.
Article 27 The branch of a payment
agency must not open a designated reserve deposit account in its own name and
can only deposit the reserves that it has accepted from its clients in the
designated reserve deposit account opened by the payment agency.
Article 28 When a payment agency intends
to adjust the positions of different designated reserve deposit accounts, the
headquarters of the commercial bank where the accounts are opened shall review
the balance of the accounts to be adjusted and inform the payment agency and
the relevant bank the opinion of the review.
A payment agency shall take the headquarters´
review opinion and proceed with the position adjustment of designated reserve
deposit accounts.
Article 29 The bank
where the reserve is deposited shall monitor how the reserves are used and
report regularly to the local PBC office information how the reserve is
deposited and used.
The bank where the reserve is deposited
shall reject the application or instruction from the payment agency for the use
of reserves in violation of Articles 25 to 28. When the bank discovers illegal
use of reserves or other abnormality, it shall report to the local PBC office
and its own headquarters immediately.
Article 30 The ratio between the paid-in
capital of a payment institution and the daily average outstanding reserve of clients
should be no less than 10 percent.
The daily average outstanding reserve
of a customer refers to the mean of total reserves of customers at the end of a
day in the recent 90 days which is calculated by the headquarter of the bank
where the reserve money is deposited with and managed.
Article 31 A payment institution should
verify the validity of the identity certificate of a customer or other documents
proving identity of a customer, and should register basic information of the
identity of the customer.
A payment institution shall duly
suspend payment services provided to a customer where the payment institution
knows or should know the customer is engaged in irregularities or crimes by
taking advantage of such payment services.
Article 32 A payment institution shall
have in place necessary techniques to ensure the integrity, consistency and
non-repudiation of payment orders, the timeliness and accuracy in the
processing of payment businesses and the security of payment. A payment
institution should be able to recover data from disaster damage and handle
emergencies to ensure the continuity of payment businesses.
Article 33 A payment institution should
keep business secrets of a customer as required by law unless otherwise
regulated.
Article 34 A payment institution should properly
keep customers´ basic identity information, payment businesses information and
accounting records as required.
Article 35 A payment institution should
accept on-site and off-site examinations of the PBC headquarter and its branch
offices on a regular or ad hoc basis, and provide relevant materials in good
faith. A payment institution must not refuse, obstruct or evade an
examination, give false information, withhold or destroy relevant evidence or
materials.
Article 36 The PBC and its branch offices
shall conduct on-site and off-site examinations on the corporate governance, business
conducts, internal control, risk situation and AML work on a regular or ad hoc
basis according to laws, regulations and relevant rules of the PBC.
The PBC and its branch offices´
on-site examination over payment institutions is subject to the governance of
the Procedural Rules on PBC Law Enforcement Examination. (The PBC´s decree
No. 1 [2010])
Article 37 The PBC and its branch offices
may take the following measures when conducting on-site examinations over
payment institutions:
(1)Requiring staff of the payment
institution to explain examined items;
(2)Reviewing and copying relevant
documents and materials related to examined items and sealing up documents and
materials that may otherwise be transferred, concealed or destroyed.
(3)Examining designated reserves accounts
and other associated accounts;
(4)Examining equipments of payment
businesses and other relevant equipments.
Article 38 The PBC and its branch
offices have the power to demand suspension in part or the entire payment
business when one of the following happens to a payment institution:
(1)Its accumulative loss exceeds 50 percent
of paid-in capital;
(2)There are major operational risks;
(3)There are major irregularities or
crimes.
Article 39 In case of termination of a
payment institution as a result of dissolution, closure by law or declaration
of bankruptcy, the specific matters relating to liquidation shall be dealt
with in accordance with the relevant provisions of laws and regulations of China.
Chapter 4 Penalties
Article 40 Personnel of the PBC and its
branch offices will be subject to administrative penalties in one of the
following cases and will be subject to criminal prosecution when a crime is
committed:
(1)Approval of the application,
alteration, termination or other items concerning the License in violation of
existing regulations;
(2)Examination of payment institutions in
violation of existing regulations;
(3)Disclosing national secrets or
business secrets;
(4)Other behaviors abusing one´s
authority or negligence.
Article 41 The PBC and its branch offices
shall demand a commercial bank to correct its irregularities within a
specified timeframe in one of the following cases and the commercial bank is
subject to warning or a fine of 10,000 yuan to 30,000 yuan. The PBC shall demand
a commercial bank to suspend or terminate the deposit and management business
of customers´ reserves in case of serious misconduct:
(1)Where a commercial bank fails to
report information on the deposit, management or use of the customers' reserve
money;
(2)Where a commercial bank fails to
review the adjustment of deposit position under the designated reserves
account of a payment institution as required;
(3)Where a commercial bank fails to refuse
an application or order to use customers' reserve money that a payment
institution sends in violation of regulations.
Article 42 The PBC and its branch offices
will demand a payment institution to correct its irregularities in a specified
timeframe in one of the following cases, and impose warnings and a fine of
10,000 yuan to 30,000 yuan to the payment institution:
(1)Where a payment institution fails to
have in place relevant systems or to take risk management measures as
required;
(2)Where a payment institution fails to
file relevant information for registration as required;
(3)Where a payment institution fails to
disclose relevant items as required;
(4)Where a payment institution fails to
report or keep relevant data as required;
(5)Where a payment institution fails to
alter relevant items as required;
(6)Where a payment institution fails to
provide invoices to customers as required;
(7)Where a payment institution fails to
keep business secrets of customers as required.
Article 43 The PBC and its branch offices
will demand a payment institution to correct its irregularities within a given
timeframe and impose a fine of 30,000 yuan on a payment institution in one of
the following cases; The PBC will revoke its License in case of serious
misconduct; where suspicious of criminal offense, the case will be sent to
public security agencies for investigation; where a criminal conduct is
committed, the committer will be subject to criminal prosecution.
(1)Where a payment institution transfers,
leases or lend its License;
(2)Where a payment institution engages in
business beyond its approved scope of business or outsource such businesses;
(3)Where a payment institution fails to
deposit or use customers´ reserves as required;
(4)Where a payment institution fails to
meet the threshold in the ratio between paid-in capital and customers'
reserves;
(5)Where a payment institution suspends
or terminates its payment businesses without appropriate reasons;
(6)Where a payment institution refuses or
obstructs relevant examinations or supervision;
(7)Where a payment institution engages in
other irregularities or crimes undermining the sound operation of payment
institutions, legal rights and interests of customers or the operation of the
payment service market.
Article 44 The PBC and its branch offices
will penalize a payment institution that fails to fulfill its AML obligations
according to AML laws and regulations; and the PBC will revoke its License in
case of major irregularities.
Article 45 Where a payment institution
continues to engage in payment businesses after the expiry of its License, the
PBC and its branch offices will demand the payment institution to terminate
its payment businesses; where suspicious of criminal offense, the case will be
sent to public security agencies for investigation; where a crime is committed,
the payment institution will be subject to criminal prosecution.
Article 46 Where a payment institution
fails to acquire a License due to inappropriate means of application such as
fraud, the applicant and investors who hold more than 5 percent of the
equities of the applicant are forbidden to reapply or participate in the
application for the License within 3 years.
Where a payment institution has acquired
a License through inappropriate means in application such as fraud, the PBC
and its branch offices will demand the payment institution to terminate its
payment businesses and revoke its License; where suspicious of criminal
offense, the case will be sent to public security agencies for investigation;
where a crime is constituted, the payment institution will be subject to
criminal prosecution; the applicant and investors who hold more than 5 percent
of the equities of the applicant are forbidden to reapply or participate in
the application for the License within 3 years.
Article 47 The PBC and its branch
offices will demand to terminate the payment business of any non-financial
institution or individuals that have engaged in payment businesses without the
approval of the PBC or in disguised forms; where suspicious of criminal
offense, the case will be sent to public security agencies for investigation;
where a crime is constituted, the payment institution will be subject to
criminal prosecution.
Chapter V Supplementary Provisions
Article 48 Non-financial institutions
engaged in payment businesses before the release of this Measure shall apply for
and acquire the License within 1 year after the day of release of this
Measure. The engagement in payment businesses is not allowed if the License is
not acquired within the time limit.
Article 49 The PBC is responsible for the
interpretation of this Measure.
Article 50 This Measure will be effective
as of September 1, 2010.
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