New state-controlled clearing house to process all payment providers’ transactions in China
Increasing visibility or curbing m-commerce players’ dominance?
Ant Financial, Tencent and 42 other payments and financial services firms in China have agreed to route their payments transactions through a new clearing house, controlled by Chinese government, according to South China Morning Post.
The companies have received a minority stake in the business that will operate the clearing house, the publication reports.
According to the new regulations introduced by the government, all payment providers (including third parties) in China must connect to the new facility by 15 October 2017. By the end of June next year, they must be processing all their transactions through it, even if a payment is a direct one between two accounts on the same platform.
The move is aimed to increase data visibility, according to the legislators. Transaction data will be available outside of third party providers for the first time – and a Financial Times report suggests user data might be shared with banks, curbing the dominance of mobile commerce players in China (such as Ant Financial’s Alipay and Tencent’s WeChat Pay). It might even be made available to other industries, such as advertising.
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