- Mainland China bank card to be mandatory for Alipay accounts
- PBOC to roll out real name registration requirements on Alipay
Alipay, China’s biggest third-party payments system, faces a setback in its push to expand overseas as the nation’s central bank tightens rules on the money kept in accounts.
Customers who don’t have a mainland China bank card won’t be able to keep money in accounts from July 1, according to a statement from parent Zhejiang Ant Small & Micro Financial Services Group on Wednesday. Alipay, which has 450 million users, didn’t specify how many customers would be affected and has told clients to clear their balances to avoid the risk of funds being frozen.
The People’s Bank of China is implementing rules that require real-name registration for all non-bank payment accounts such as Alipay, the most popular way for people to shop on Alibaba Group Holding Ltd.’s platforms. The regulations could impact Alipay’s expansion pace in China and overseas, as customers are forced to hand over more information and face caps on the amount they can transfer or deposit.
Overseas users will still be allowed to use other payment methods, such as credit cards, to shop on Alibaba websites such as Taobao and Tmall.com, the company said.
Users in China will be classified into three categories depending on how much information they are willing to hand in, which will affect how much can be put into accounts or transacted.
The central bank said in December the policy was partly aimed at preventing large sums being put into accounts that are beyond the protection of bank deposit insurance, such Alipay and Tencent Holdings Ltd.’s Weixin Payment.
Tencent shares fell 1.1 percent to HK$161.10 in Hong Kong trading.
In the first three quarters of 2015, payment institutions’ online transaction volume totaled 32.97 trillion yuan, almost doubling from a year earlier, official news agency Xinhua reported.
Ant Financial, as the parent is known, is marching toward a potential initial public offering after being valued at about $60 billion in its recent round of fundraising, according to people familiar with the matter.
(An earlier version of this story corrected Ant Financial’s name in the second paragraph.)