The State Administration of Foreign Exchange (SAFE) has claimed that the expansion will allow qualified third-party payment institutions to join a pilot programme to provide centralised receipt and payment services of foreign exchange and the associated buying and selling services, asiaone.com reports. The transactions must relate to online payments for cross-border ecommerce.
Previously, a transaction for a single shipment could not exceed the equivalent of USD 10,000. The limit for a single transaction related to overseas education, airline tickets and hotels was USD 50,000 or the equivalent. The cap for a single shipment has been raised to USD 50,000, the same as for education and travel.
To join the pilot programme, payment institutions must register as foreign exchange receipt and payment companies at a local SAFE bureau. They must also verify the authenticity of each transaction, maintain records for five years and report relevant business information and statistics to the regulator promptly.
Ecommerce transactions hit USD (1.86 trillion) (CNY 8.6 trillion) during Q1-Q3 2014, according to data issued by the Chinese Ministry of Commerce. Since September 2013, the SAFE has given approval for 22 third-party payment institutions such as Alipay, the online payment arm of Alibaba Group, to conduct cross-border foreign exchange payment business in five cities including Beijing, Shanghai and Shenzhen.
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