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China preps central clearing house for mobile payments providers

11 August 2017  |  15400 views  |  0 Chinese Flag

The People's Bank of China is set to make digital payment firms such as Ant Financial and Tencent use a new central clearing house, a move which will see companies forced to share transaction data with rivals.

China has become the world's mobile payments leader, with non-bank providers handling nearly $15 trillion in transactions last year, according to a central bank unit.

This has made the likes of Alipay and WeChat Pay an important part of the economy, prompting the move to force all third-party payment firms to use the new clearing house, called Wanglian, by next June.

Zhang Yu, from consultancy iResearch, told the Financial Times that this means that previously proprietary transaction data will probably be shared with rivals, a move that could aid normal banks.

"The launch of this clearing house is a one-sided loss for the payments institutions," he says.

Meanwhile, the central bank is also planning to bring non-banks in areas such as peer-to-peer lending, crowdfunding and private equity, into its risk-assessment system.

Separately, the People's Bank appears to have been spooked by Alipay's recent 'Cashless Week', sending out a notice to regional offices asking them to work to prevent the "phenomenon of cash being rejected" by merchants, according to Quartz.

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