Exclusive: PBOC Backtracks on ‘No Interest’ Policy for Third-Party Payment Providers

Caixin Global | Jan 7, 2020 at 8:13 PM
  • China’s central bank has finally bestowed some good news on the third-party payment industry after a two-year campaign to tighten oversight of the booming sector as part of a broader initiative to combat fraud and curb financial risk.
  • The PBOC originally decided against paying interest because payment companies are not subject to the same level of capital supervision as commercial banks.
  • In 2013 it required payment companies to put customer funds in special accounts at custodian banks, and in 2017 it ordered all payment companies to submit 20% of clients’ deposits to designated central bank accounts, gradually raising the figure to 100% by January 2019.