Chinese social media brimmed with conversation following rumors that mobile payment platforms including Alibaba-backed payment platform Alipay would be required to report payments of RMB 50,000 (around $7,000) and above to the People’s Bank of China (PBoC), underscoring concern over regulation in the payments sector.
Alipay denied the rumors of tightened control of money transfers on Chinese microblogging platform Weibo, saying the requirement applies to transactions of more than RMB 500,000.
Rumors about the controls appeared on the Chinese internet and social media on Wednesday. Chinese media reported that for safety reasons all online payment services would be required to follow new rules for transactions, which would encompass PBoC monitoring from Jan. 1, 2019.
Reports stated that a new policy would apply to those who pay their shopping bills via Alipay, WeChat, or other payment apps, and transactions of more than RMB 50,000 would need to be reported.
“As required, Alipay will only report domestic trades of more than RMB 500,000 per individual to the central bank,” a spokesperson from the payments giant told TechNode. The company also mentioned that the rules for reporting large transactions have existed for Chinese banks for years.
The PBoC issued a policy document in June focusing specifically on large transactions made on non-bank platforms. The new policy does include a rule based on a figure of RMB 50,000. However, this applies to third-party payment agencies having to report payments made in cash which exceed that amount.
Alibaba’s payment arm said that online payments do not fall into the category of “cash transactions,” and therefore the provision does not apply.
Still, it is the first time that local non-bank entities will be subject to regulation that requires transaction reporting. Beijing aims to crack down on money laundering by taking more control over non-banks. These include online payment platforms, public and private funds, and trusts.