Alipay, WeChat Pay and China’s other third-party payment providers must route all transactions through a government-controlled clearing house by June 2018, in an apparent move towards increasing data visibility.
According to a Financial Times (FT) report, the move could mean user data is shared around the banking industry, and curb the dominance of mobile commerce players in the country.
New regulations from the People’s Bank of China require all companies to connect to the new facility by 15 October and process all transactions through it by end-June 2018.
By banning direct payments – even between two accounts using the same platform – transaction data will be available outside of third party providers for the first time.
This could lead to the information being made available for other services including advertising or other financial products.
The new regulations are the latest government measure to bring third party payment providers into line with other financial institutions, and expand on rules around customer reserve funds introduced earlier this year.
Reports earlier this week by South China Morning Post said Alipay’s owner Ant Financial, WeChat Pay parent Tencent and 42 other financial companies had signed an agreement to use the new system. The companies received a minority share in the business set up to run the clearing house.