PBOC Rethinking Mobile Payment Caps (March 26, 2014)
China’s central bank said it’s open to modifying a proposal to place limits on mobile payments after e-commerce firms and consumers objected to the restrictions. According to multiple reports, the People’s Bank of China (PBOC) this week said it previously had released a draft of rules restricting mobile spending, which the bank sent to various leading e-commerce companies. However, the bank said the rules were only a working draft.
The PBOC had not previously confirmed it was considering such rules, but leading e-commerce and payment provider Alibaba Group acknowledged it had received a copy of the draft rules, which the company said called for a limit of 10,000 yuan (US$1,610) a year in mobile payments per individual, along with a 1,000 yuan (US$161) cap for a single mobile funds transfer. The PBOC said in an interview with the Xinhua News Agency the proposed spending limits were intended to mitigate “business risks,” but that it was open to revising the caps if consumers thought they were unreasonably low.
With mobile payments gaining popularity in China, rumors of the proposed limits reportedly stirred unrest with consumers, investors and mobile payment providers—which have in recent years begun to overlap into the country’s state-dominated financial sector. Last week, the PBOC announced a temporary suspension of online payments using QR codes and virtual credit cards, a move that halted the rollout of new virtual cards from Alibaba’s Alipay division and Tencent Holdings Inc. The bank said it would permit such services to be launched once certain security measures were put into place.