The People’s Bank of China (PBC), which sets China’s monetary policy and regulates some areas of the country’s banking industry, has issued a set of guidelines that cap the amount that individuals can spend online at 1,000 renminbi (US$123.53) per transaction, according to its Web site.
In addition, the newly issued guidelines, entitled “Guidelines for Electronic Payment (No.1),” restrict the amount that Chinese users can spend using electronic payments made via the Internet and mobile phones at 5,000 renminbi per day. The Chinese central bank said the new rules are intended to limit the possibility of fraud.
Not all online payments are affected by the new guidelines. Transactions that require the use of a digital signature and certificate to identify the buyer are exempted from the payment limits, according to the rules.
Online payments have just begun to gain serious traction in China, led by Alibaba.com Corp.’s AliPay service, eBay Inc.’s PayPal service and Shanghai-based 99Bill Corp.
What impact the new guidelines will have on these third-party payment services, and e-commerce in general, is unclear. The payment guidelines issued by PBC appear to be directed at banks. The published guidelines removed references to third-party payment providers that were included in a draft of the regulations circulated in June for feedback from the public, according to a comparison of the two documents.
The title of the regulations suggests that one or more additional sets of rules governing online payments will be issued by PBC at some point in the future, perhaps clarifying the impact on payment providers.
However, the new regulations should not have a significant impact on Chinese Internet users, as those who shop online generally spend less than 1,000 renminbi, according to a survey conducted by the China Internet Network Information Centre (CNNIC).
According to the CNNIC survey, 23.9 per cent of Chinese Internet users who shopped online said they spent more than 1,000 renminbi during the first six months of 2005. In addition, less than half of all Internet purchases were paid for using online payment, it said.