China's central bank said on Wednesday that more foreign-funded institutions are welcome to enter the payment market to create a more competitive sector.
The People's Bank of China on Monday eased restrictions for these foreign-funded institutions to invest in payment service providers, according to a notice.
The move will grant full national treatment on the foreign institutions. China aims to create an even playing field for both domestic and foreign capital by unifying the access standards and regulatory requirements for market access and entry.
Overseas institutions which intend to offer domestic and cross-border transaction services for subjects within the territory of the country must have corresponding qualifications and a relevant payment business license, the notice said.
They are supposed to set up a "safe, standardized and independent" business system and disaster preparedness system in China.
The PBOC said foreign companies should store, process and analyze users' personal and financial information in China as long as they are collected and generated within the country.
The foreign-funded payment institutions should also meet the central bank's regulatory requirements for corporate governance, daily operation, risk management, capital treatment and deposit of reserves, the notice added.
Wang Pengbo, an analyst with consulting firm Analysys, said that foreign investment will create a competitive payment industry and boost product innovation.
Zhang Yu, an analyst with iResearch Consulting, noted that foreign mobile phone makers like Apple Inc and Samsung Electronics with their high number of Chinese users might consider entering the market with their payment services.
In 2010, the PBOC began to issue licenses to Chinese online third-party payment platforms to better regulate and supervise their services which were launched to tap the burgeoning electronic payment business.
From 2013 to 2017, the number of transactions handled by domestic payment institutions increased around nine-fold to 319.3 billion, while the transaction amount surged from 18 trillion yuan (U.S..8 trillion) to 169 trillion yuan.
The transaction number surged by a compound rate of 71 percent while the amount soared 75 percent during the same period, the notice said.