China issues rules on supervision, administration of non-bank payment institutions

BEIJING -- Chinese Premier Li Qiang has signed a decree of the State Council to unveil rules on the supervision and administration of non-bank payment institutions, which will take effect on May 1, 2024.

The rules are meant to promote the law-based supervision and administration of such institutions and their business operations, facilitate the sound and healthy development of the sector, protect customers' legal rights and interests, and help the institutions better serve the real economy and meet the need of customers for diversified payment methods.

The new rules have clarified the definition of non-bank payment institutions and their establishment requirements and improved payment-related rules.

In order to protect the legal rights and interests of payment users, such institutions should establish effective due diligence systems and enhance risk management, according to the rules. The institutions should also ensure the security of payment accounts and guard against illicit fundraising, telecom fraud, money laundering, gambling and other criminal activities, the rules noted.

The rules have defined the supervisory and administrative duties and measures of the People's Bank of China, the country's central bank, as well as outlined its risk management methods, and asked local governments to cooperate with the central bank in managing risks.