New regulations concerning digital payment service providers have been approved by the State Council in China. These regulations, which were published in November and will come into effect on May 1, 2022, aim to adapt to greater supervision and regulation of the growing non-bank payment sector in China.
Previously, there was a lack of regulations in the industry, which concerned the Chinese government and prompted them to develop new rules. The State Council also sought public opinion on the draft regulations, which were released in January of this year.
According to the new regulations, non-bank payment institutions must adhere to more stringent standards and procedures to ensure the security and stability of their payment services. They will also be subject to regular inspections and audits to assess their risk management capabilities and compliance with relevant regulations.
The regulations also include provisions to protect consumer rights and prevent fraud. Non-bank payment institutions will be held liable for any losses incurred by consumers as a result of security breaches or system failures.
These new regulations are a significant step towards a more regulated and secure landscape for digital payments in China. Although the industry has experienced exponential growth in recent years, the Chinese government is aware of the need for stronger oversight to protect consumer interests and maintain financial system stability.
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