China to Limit Online Transactions in Effort to Reduce Fraud
April 21, 2014
According to reports out of China, government regulators there have decided to limit the amount of money consumers can transfer to third-party payment systems for use online. Earlier this month, the People’s Bank of China and the China Banking Regulatory Commission informed the country’s banks they must be prepared to impose those limits, which would restrict the amount they could transfer between consumers and services like Alipay in any one day, by June 30. They also must be able to verify consumers’ identities when they link their accounts at third-party payment platforms to their bank accounts.
In a letter to banks, government officials cited “an explosion” of online and mobile fraud affecting consumers and banks as the driving force behind the move.
“The requirements governing the establishment of business relations between commercial banks and third-party payment institutions are aimed to strengthen management of such business,” the regulators said. “They are also put forward to protect the safety of commercial bank clients’ information, funds and bank accounts and maintain the clients’ legitimate rights.”