Steps urged to cut online finance risks

Updated 2018-03-09 11:14:05 China Daily

China UnionPay chairman calls for higher entry threshold for industry

China should regulate market access to the payment industry more strictly to help prevent financial risks, said Ge Huayong, chairman of China UnionPay and a member of the country's top political advisory body.

Ge noted that there may be a rise in risks associated with internet finance in some areas this year, and that while potential risks also exist in the payment industry, there are no big problems.

"I hope regulators will raise the threshold of market access for the payment industry by raising requirements on the capital and provisions of third-party payment institutions," he said on Wednesday after group discussions on major issues in China during the first session of the 13th National Committee of the Chinese People's Political Consultative Conference.[Special coverage]

According to current requirements of the People's Bank of China, the central bank, starting from April 17 last year, non-bank payment institutions must submit a certain proportion of provisions-ranging from 10 to 24 percent, depending on their type of business-to a single account opened at a commercial bank designated by the PBOC.

Acknowledging the good effect of the policy, Ge said he hopes the market will become more standardized.

"Many technology companies are flooding into the payment industry without a clear understanding of risks. Some of them do not know how serious financial risks could be until they have caused a social problem. It's too late," he said.

To ensure prudential operation, he stressed that each payment institution should have a license to provide payment services, as a licensed third-party payment institution would put equal emphasis on innovation and standardization.

"When making payment innovations, we cannot just focus on the speed of transactions and customer experience and ignore safety," he said. "It's necessary to encourage innovation. However, irregular innovation will cause market disorder. As every coin has two sides, we must strike a balance between the convenience and potential risks brought by innovation."

In addition to orderly and regulated innovation, he is also looking forward to the improvement of technical and business standards for the payment industry and is calling for self-discipline among payment service providers.

"We hope that the existing risk defense system will be expanded to include more third-party institutions, so as to identify risks, issue an alert and handle risks as early as possible," he said.

Also in the News

Nicole Kidman Recalls Oscar Glory: Loneliest Time
Showbiz2016/06/16 13:58February 20 2019 06:04:53

Nicole Kidman Recalls Oscar Glory: Loneliest Time

Attending Shanghai International Film Festival, Nicole Kidman talks about her role in "Grace of Monaco".

Labor Day Travel Peak Starts
Also in the News2014/05/01 12:16February 20 2019 06:04:53

Labor Day Travel Peak Starts

Johnny Depp Delivers a Speech 'Evolve the Future' in 'Transcendence'
Also in the News2014/04/18 13:18February 20 2019 06:04:53

Johnny Depp Delivers a Speech 'Evolve the Future' in 'Transcendence'

Hollywood star Johnny Depp's speech in the upcoming new film "Transcendence" has been disclosed on Friday, April 11th.

China World Business Sports Showbiz Audio
C4 My Chinese Life The Sound Stage China Revealed Showbiz Video Travel Video
China World Fun Travel Entertainment Sports
Beijing Shanghai Guangzhou
Live Music Opera & Classical Movies Traditional Shows Exhibitions
Learn Chinese:
Chinese Studio Living Chinese Everyday Chinese Just For Fun Chinese Culture Buzzwords