BEIJING: 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 do not have a Chinese bank card are not to be able to keep money in accounts from July 1, according to a statement from parent Zhejiang Ant Small & Micro Financial Services Group yesterday.
Alipay, which has 450 million users, did not 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 are still to be allowed to use other payment methods, such as credit cards, to shop on Alibaba Web sites, such as Taobao and Tmall.com , the company said.
Users in China are to be classified into three categories depending on how much information they are willing to give, which is to affect how much can be put into accounts or transacted.
The central bank said in December last year that 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.
In the first three quarters of last year, payment institutions’ online transaction volume totaled 32.97 trillion yuan (US$5.04 trillion at current exchange rates), almost doubling from a year earlier, Xinhua news agency reported.
