Canada    FinTech Guide    Chapter 1    China

1. Payment Services / Mobile Payment
China  China

In China, online payment services have become very popular. In most of the restaurants, supermarkets, convenience stores, taxis, hospitals, entertainment venues of the main cities, even if abroad, online payment services are available. The government is encouraging the development of online payment services while being conscious of the potential risks.

Legal Affairs

First of all, the payment services in China may be divided into 4 classes: online payment service, payment service by prepaid cards, payment service from POS, other payment services determined by People’s Bank of China (PBOC).

In China, the Payment Service is under strict supervision of PBOC. Any entity engages in any Payment service activity shall obtain a Payment Business License. Separately, since the FinTechs actually provide information/content/services through Internet, hence, FinTech shall apply for an ICP (“Internet Content Provider”) license to the telecommunication authority. It is worth being aware that the foreign investment in the FinTech applying for an ICP license shall be no more than 50%. Currently, the service providers who have obtained the online payment service license are all domestic companies, without any foreign invested company. Further, due to the policy restriction, PBOC does not issue any new online payment licenses in recent years.

The PBOC requires Payment Service providers to develop effective measures and a risk control mechanism to protect customer information.

Payment Service providers shall abide by relevant provisions on anti-money-laundering and fulfill anti-money-laundering obligations.

Economic Conditions

Around the world, the popularity of online payments continues to grow each year, and this is especially the case in China. Among the various online payment services, the third-party mobile payment services have shown a huge market potential. In 2018 alone, Chinese third-party mobile payment transaction volumes exceeded $30,000 billion, with year-on-year growth of 58.4%. In China, the successful online payment service providers are actually developed based on the social platform, rather than pure payment service. Therefore, the viscosity of customers is strong. Currently, in order to get the development opportunities, the FinTechs in this area are considering how to provide more convenient and fast payment experience. Currently, some big Internet players are researching the various payment approaches, like fingerprint/face recognition payment.

Contributing Authors


Norah Yinuo Zhang
Beijing, China

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Chapter Index:

1. Payment Services / Mobile Payment

2. Asset and Portfolio Management

3. Consulting and Broking Services / Robo-advisory / Auto-trading

4. Trading Platforms / Social Trading Platforms / Signal Following

5. Crowdfunding / Crowdinvesting / Crowdlending

6. Virtual Currency - Bitcoin

7. Loan Services / Factoring / Loan Broking / Finetrading

8. Online Banking Services

9. Analytics and Research / Data Management / Risk Management

10. Accounting

11. Identification

12. Online-pawning

13. InsurTech

14. RegTech

15. Initial Coin Offerings (ICOs)

The information in this guide provides a general overview at the time of publication and is not intended to be a comprehensive review of all legal developments nor should it be taken as opinion or legal advice on the matters covered. It is for general information purposes only and readers should take legal advice from a Multilaw member firm.

Publication Date: 1 August 2019