Chinese Gov’t Halts Virtual Credit-Card Plans
March 17, 2014
The People’s Bank of China (PBOC) has put the brakes on initiatives from Chinese e-commerce giants Alibaba Group and Tencent Holdings to market virtual credit cards for online purchases. On Friday, the Chinese central bank suspended the use of mobile payment services that enable online payment by scanning a QR code. Earlier in the week, both companies announced a plan to offer virtual credit cards issued by China CITIC Bank. To complete a purchase using the virtual card numbers, consumers would scan a QR code with their mobile device.
On Friday, the PBOC blocked the companies from proceeding with their plans, citing security concerns regarding increased risk to consumers’ personal information. A central bank spokesperson noted that the government has “suspended, not banned, these businesses.”
Both companies said they are working with the PBOC to resolve its concerns and move ahead with the planned launches.