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China Outlines Statutory Requirements for Foreign-Invested Payment-Processing Businesses

Prior to the official opening up of the mainland payment services market to foreign investors, the People’s Bank of China (PBOC) has outlined the mandatory access standards and regulatory requirements.

 In particular, it has flagged up four specific conditions that would-be investors need to comply with: 

  • Any non-mainland institution intending to provide e-payment services for domestic and / or cross-border transactions conducted by a mainland-based entity should first establish a foreign-invested enterprise in China. It must also secure a payment service licence in accordance with the qualification requirements and approval procedures outlined in the Administrative Measures for Payment Services Provided by Non-Financial Institutions.
  • Said institution must also have in place a secure, standardised mainland-based system capable of independently processing all such payments. It must also institute appropriate disaster recovery arrangements.
  • The storage, processing and analysis of any personal or financial data collected or generated by the institution must be conducted within China. In all instances where it is necessary to transfer any such data outside of the mainland for the handling of cross-border business, the transfer must be conducted in compliance with all of the applicable laws and administrative regulations as well as the requirements of the supervisory departments concerned. Additionally, the non-mainland institution party to any such transaction must consent to abide by all of the prevailing confidentiality obligations, including seeking the consent of the subject of any personal data.
  • Said institution’s corporate governance, daily operations, risk management procedures, fund processing operations, reserve fund deposits and emergency response plan must also comply with the regulatory regime specified by the PBOC with regard to non-bank payment institutions.

For further details (in Chinese), please visit the following link:

Announcement of the PBOC (No. 7 [2018])

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