Opinion Leader | Mo Kaiwei
Recently, the Central Bank issued the Regulation on the Supervision and Administration of Non bank Payment Institutions (hereinafter referred to as the Regulation) on December 17 last year, which will be implemented on May 1, 2024. In order to ensure the smooth implementation of the Regulation and effectively solve various problems that may be encountered in the implementation process, The Central Bank has studied and drafted the Detailed Rules for the Implementation of the Regulations on the Supervision and Administration of Non bank Payment Institutions (Draft for Comments) (hereinafter referred to as the Detailed Rules), which is now open to the public for comments.
Many netizens are surprised that since the Regulations have been issued, why should the Detailed Rules be issued? Is there any suspicion of overlap or unnecessary action? This is not the case. The Central Bank must have its reasons for issuing the Detailed Rules again. Because the previous Regulations reclassified payment business into two categories: stored value account operation and payment transaction processing, but the specific classification method and the corresponding relationship between new and old payment business still need to be clarified. It is necessary to formulate detailed rules to clarify the transition period arrangement, the connection between new and old payment business, etc. In addition, the previous Regulations did not completely subdivide the operation of stored value accounts and payment transaction processing business, nor did they clarify the corresponding relationship between the old and new classification methods. The Detailed Rules need to be issued to promote the balanced transition of the new and old payment business classification methods. In addition, the previous Regulations did not detail the user rights protection mechanism, nor did they specify the time limit for keeping user data and transaction records, charge adjustment requirements and other related contents.
It is obvious that the Central Bank issued the Detailed Rules this time with a clear purpose: to further clarify the important concepts and connotations in the Regulations, refine the provisions of administrative licensing, do a good job in undertaking the cohesive provisions of the Regulations, and eliminate the "fuzzy areas" in the implementation, so as to provide effective guarantee for the implementation of the Regulations and promote the smooth transition of the new and old payment business classification methods.
So, what are the highlights of the Detailed Rules issued by the Central Bank this time, and what are the positive financial impacts on relevant non bank payment institutions and national financial consumers? It can be seen from the contents of Article 80 of Chapter 6 of the Detailed Rules that there are mainly four aspects worth the attention of non bank payment institutions and national financial consumers:
First, it will not change the scope of the original payment business license, which will play an effective role in ensuring the steady development of the business of the non bank payment institutions, and will be more conducive to promoting the standardized development and stability of the non bank payment institutions.
Previously, non bank payment business was divided into online payment, bank card acquiring and prepaid card business according to transaction channels and acceptance terminals; However, with the technological innovation and business development, new methods such as bar code payment and face brushing payment have emerged, and the original classification method cannot meet the market development and regulatory needs well. In this regard, the Regulations combine years of regulatory practice, draw on the experience of other countries and regions in the classification of payment business, adhere to the concept of functional supervision, and start from the essence of the business, according to whether it can receive prepayment from the payer, it is divided into two categories: stored value account operation and payment transaction processing. So many netizens are worried about whether the business scope of existing non bank payment institutions will be changed after the promulgation of the Regulations. The answer is that it will not change the scope of the previous business license. Because the stored value account operation mentioned in Article 15 of the Regulations is divided into stored value account operation category I and stored value account operation category II; Payment transaction processing is divided into payment transaction processing category I and payment transaction processing category II, so that the business scope of non bank payment institutions is handled ingeniously, and basically remains the same as before.
After the release of the Detailed Rules, the specific classification methods and the connection between new and old businesses were more clearly defined, and the licensing framework under the current classification method was fully considered to promote the smooth transition of the new and old classification methods, which will not change the scope of payment business licenses that payment institutions have obtained, and is not expected to have an impact on the business continuity and user experience of payment institutions, It can ensure the stable development of the business of non bank payment institutions, so that third-party payment institutions such as WeChat and Alipay can rest assured!
Secondly, a relatively loose five-year certificate renewal transition period was given, which not only played a certain role in urging the non bank payment institutions, but also ensured that the non bank payment institutions responded calmly and fundamentally ensured the smooth transition of the business of the non bank payment institutions.
The Regulations, which will be implemented on May 1, has determined the renewal schedule and road map for the existing non bank payment institutions, but many people still worry about whether the existing institutions can complete the renewal task within the specified time limit, such as whether the expiration date of the payment business license exceeds one year. In this regard, the Detailed Rules have more explicit explanations and provisions, and set a relatively leisurely "certificate renewal transition period". Article 76 of the Detailed Rules makes it clear that non bank payment institutions that have been established in accordance with the relevant provisions before the implementation of the Regulations shall meet the requirements of the Regulations and these Detailed Rules for the establishment of non bank payment institutions and the ratio of net assets to the average daily balance of reserves before the end of the transition period. If the requirements are not met at the end of the transition period, the payment business shall be terminated.
At the same time, it is stipulated that the validity period of payment business license of payment institutions is 5 years. Due to the different application time of payment institutions, the expiration time of payment business license is also different. In this way, the transition period of certificate renewal for some institutions can be as long as nearly 5 years. In addition, special provisions have been made on the renewal time of expiring non bank payment institutions: considering that the payment business licenses of 17 payment institutions will expire on July 9, 2024 and March 25, 2025 respectively, which is close to the implementation date of the Implementation Rules, in order to avoid the two batches of payment institutions being unable to meet the requirements of net assets, daily average balance ratio of reserves, etc. due to time constraints, The Detailed Rules propose that the transitional period for license renewal of each non bank payment institution shall be from the implementation date of the Detailed Rules to the expiration date of its payment business license. If the transitional period for license renewal is less than 12 months, it shall be calculated as 12 months. In this way, the renewal time of the non bank payment institution has at least one year of adjustment and transition time, so that the institution has a relatively sufficient renewal transition period, which can ensure the smooth transition of the volume payment institution without changing the original scope of payment business license. In particular, upon the expiration of the transition period, the Central Bank will review the establishment conditions of the existing payment institutions through the renewal of the payment business license procedure, which will not have a negative impact on the normal business operation of the non bank payment institutions.
Thirdly, from RMB 100 million to RMB 400 million, the minimum added value of registered capital and other details are clear, ensuring the flexibility of the registered capital of the non bank payment institutions, so that the non bank payment institutions in different business types and regions can get their own place.
Article 10 of the newly issued Detailed Rules stipulates that the minimum registered capital of non bank payment institutions shall be increased on the basis of 100 million yuan and according to different conditions such as the scope of business. There are mainly four types: for those only engaged in Class I business of stored value account operation, the minimum additional value of registered capital is 100 million yuan; For those who only engage in Class II business of stored value account operation in the place of residence, there is no need to add the minimum amount of registered capital. If the scope is expanded, an increase of 5 million yuan to 100 million yuan is required; For those who are only engaged in payment transaction processing Class I business in the place where they are domiciled, the minimum registered capital does not need to be added, and the scope of expansion needs to be increased by 5 million yuan to 100 million yuan at the same time; For those only engaged in payment transaction processing II business, the minimum registered capital does not need to be added. In this way, it is ensured that the required registered capital is positively related to the importance of business and the breadth of business area; Moreover, the registered capital is not required to be unified across the board. Instead, it is required to be refined according to the business scope, license type and geographical scope, which is in line with the reality of industry development and the corresponding risk needs of various business types, and can stimulate the business vitality of non bank payment institutions to the greatest extent.
At the same time, the Detailed Rules make it clear that, according to the principle of regulatory importance, appropriate delegation of approval authority for some payment institutions to change matters, reduction of approval levels, establishment and improvement of an efficient and fast change matter handling mechanism, and implementation of "subtraction" in the approval process and "addition" in the approval efficiency can provide effective institutional guarantee for better building a legal business environment.
Finally, the determination of the balance of reserves according to the standard of "excess regressive" can not only promote the non bank payment institutions to improve their risk defense capability, but also consolidate and improve the protection mechanism for users' rights and interests, so that China's non bank payment institutions will never risk.
A notable feature of the Detailed Rules issued this time is that the ratio of the net assets of payment institutions to the daily average balance of provisions is set in a stepwise manner, and the retention time limit of user data and transaction records, and the requirements for fee adjustment are specified. If the calculation standard of net assets of non bank payment institutions is specified, the excess regressive method is adopted to determine according to five standards, that is, the daily average balance of reserves is 50 billion, 50 billion to 200 billion, 200 billion to 500 billion, 500 billion to 100 billion, and more than 1 trillion, respectively, 5%, 4%, 3%, 2%, and 1%. It can be seen that reasonably and moderately increasing the requirements for registered capital and net assets on the basis of full communication can ensure that the non bank payment institution has a higher net asset sheet, so that the non bank payment institution has a stronger solvency, lower financial risk and better profitability, so as to enhance the risk defense capability of the payment institution, strengthen corporate governance and steady operation, and better serve the real economy. In particular, clarifying the minimum net asset limit of non bank payment institutions and the ratio of the daily average balance of assets and reserves is an important embodiment of ensuring the security of the payment system and customers' funds.
The Detailed Rules are even more painstaking in protecting the rights and interests of financial consumers. The previous Article 17 of the Regulations proposed that non bank payment institutions should establish, improve and implement compliance management systems, internal control systems, business management systems, risk management systems, emergency response plans and user rights protection mechanisms in accordance with prudent operation requirements. In this regard, the Detailed Rules further refined the relevant provisions, the user rights and interests protection mechanism proposed in the Regulations, and the Detailed Rules gave a comprehensive and profound explanation, pointing out that the user rights and interests mechanism refers to the internal control system and working mechanism to protect users' basic rights such as the right to property security, the right to know, the right to independent choice, the right to fair trade, the right to be respected, and the right to information security. This effectively expanded the scope of user rights and interests protection mechanism, including user information security protection mechanism, important information disclosure mechanism, complaint handling mechanism, loss compensation mechanism, user rights and interests protection scheme in the process of payment business termination. In this way, the supervision will cover all business links of non bank payment institutions, which can effectively plug all kinds of loopholes and eliminate disputes, Safeguard the legitimate rights and interests of financial consumers to the greatest extent.
(About the author of this article: well-known financial commentator and independent economist)
