Under draft rules proposed on 20 January, the People’s Bank of China (PBOC) can advise the state council’s antitrust committee to stop companies abusing their dominant position or even break up a non-bank institution if it ‘severely hinders the healthy development of the payment service market’.
The PBOC’s proposed rules coincide with a wider government clampdown on the financial activities of Chinese technology giants amid growing concern over the risk of financial contagion resulting from their empire building.
The PBOC will hold talks with institutions over their market dominance once a single player’s market share reaches a third of the total non-bank payments industry or when the market share of two players combined reaches half of the total.
It will also identify institutions as having a monopoly once a single player garners more than half of the market in nationwide electronic payments, which also includes online and mobile banking payments.
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