Alipay fined for violating payment services regulations

In the filing, the Shanghai branch didn’t elaborate on the wrongdoing by Alipay, which is an affiliate of ecommerce large company Alibaba Group Holding. At the end of July 2018, Alipay’s rival Tenpay, which is backed by social media giant Tencent Holdings, were each fined 600,000 yuan by the country’s foreign exchange regulator for violating rules on handling cross-border payments.

Then, Alipay was accused of offering unauthorized cross-border payments while Tenpay was caught mishandling clients’ payments, the State Administration of Foreign Exchange said on July 24, according to Asian publication Caixing.

Separately, the central bank’s head office fined two other payment platforms - gopay.com.cn and UMF - for transgressions including failing to verify transactions, providing services for unidentified users and violating rules of capital reserve and cross-border money transfer.

The penalties are part of a stepped-up central bank crackdown on misconduct in China’s multi-trillion dollar online payment market involving consistent fines on violators. Moreover, it is also reflecting the financial regulators’ efforts to fight fraud and money laundering that have increasingly thrived on the internet and used online payment platforms to facilitate dodgy transactions.

Starting with 2019, the central bank will require third-party payment providers to report large-amount and suspicious transactions, a rule in line with commercial banks in a bid to prevent money laundering, fraud or terrorist financing.