- Measures on Regulation of Payment Services of Non-financial Institution (PBoC Circular 2)
- August 16, 2010
- Law Firm: Troutman Sanders LLP - Atlanta Office
On June 21, 2010, the People's Bank of China (“PBoC”) promulgated the Administrative Measures on Payment Service of Non-financial Institution (“PBoC Circular 2”), which introduces a nationally unified administrative permit, the payment services license. The Regulations have no grandfathering provisions so any existing provider already supplying payment services must apply for a payment services license within one year after PBoC Circular 2 takes effect on September 1, 2010, i.e. by August 31, 2011.
The payment service of non-financial institutions as defined in this circular refers to that the non-financial institutions provide the following transfer services of monetary capital as an intermediary between payees and payers:
- Online payment;
- Issuance and acceptance of prepaid card;
- Bank card acceptance; and
- Other payment services as specified by the People's Bank of China.
If a payment service provider intends to apply for a national-wide payment services license, its registered capital shall be no less than RMB100 million. If it intends to engage in payment business within a province, its registered capital shall be no less than RMB30 million. The registered capital shall be paid-in monetary capital. In addition, a major investor of the payment service provider (an investor who holds 10% equity interests of or actually controls the payment service provider will be regarded as a major investor) should have provided payment services for more than two years and made profits for more than two years consecutively.
Please note that PBoC Circular 2 does not apply to foreign invested payment services providers. PBoC will issue separate regulations in this regard.