China Sets up Centralized Clearing Platform for Online Payments
The People’s Bank of China, the country’s central bank, has required all banks and third-party payment institutions to connect to a unified platform by June 30 of 2018 to ensure effective regulation and transaction security.
The new platform, dubbed Nets Union Clearing Corp., is aimed at enhancing supervision of the country’s expanding online payment market. The platform was set up by 45 companies, including the PBOC which own a 12% stake in the platform.
At present, most third-party payment institutions are directly connected with banks for processing online payment transactions. However, according to a document the central bank released Friday, all banks and third-party payment institutions in China, must complete preparation of connecting to the unified platform Nets Union Clearing Corporation (NUCC) before October 15, 2017 and all online payment involved bank accounts will be carried out on the NUCC since June 30, 2018.
China has the largest third-party payment users and transaction volume in the world while the central bank could not have detailed transaction information and capital flow due to the direct payment tools-bank connection which can be taken advantages in money laundry, credit cards cashing out and illicit money transferring. (Source: finance.sina)
Visa Submits Bankcard Clearing Business Application to PBOC
On August 4, international credit card brand Visa Inc. said it had submitted an application to China’s central bank for setting up a bankcard clearing body in China. If the application is approved, it will break the monopoly in a multi-trillion-dollar market foreign firms have been trying to tap for decades.
Bankcard clearing business refers to settling and transferring funds among banks as well as between banks and businesses that accept bankcards, according to the report.
China UnionPay has until now been the only service provider in the country’s domestic bank card clearing market since its establishment in 2002. Foreign rivals such as MasterCard could only handle Chinese travellers’ transactions overseas. The central People’s Bank of China called the move a “the first step towards full opening” of the sector, noting that foreign companies can also apply to enter the sector, which was worth 449.9 trillion yuan ($72.6 trillion) last year.
According to the statement of PBOF, the applicants must, among other things, be incorporated in China and have more than one billion yuan in registered capital. (Source: finance.sina)
Tencent and China Development Bank Sign an Agreement to Collaborate on ‘Internet +’ Strategy
Earlier this month, the China Development Bank and Tencent signed an “Internet +” development financial strategic cooperation agreement. In the future, the two entities will collaborate on “Internet +” “precision” poverty relief, Internet financial innovation, onshore and offshore credit financing, technological and innovative enterprise incubation, information technology applications and other areas.
Recently, China has banned online loans to college students which has been accompanied by outrage over various financial scams.
China Development Bank is a “policy financial institute” under the State Council, and it covers over 90% of the student loans market. This time, Tencent and China Development Bank decide to launch a brand new series of students’ loans services with stronger stringent compliance.
In order to ensure smooth disbursement of State-subsidized student loans and facilitate loan application for college students from poverty-stricken families, the two sides decide to re-formulate the loan process and revise the internal management methods and relevant contracts. With advanced technologies, new application procedure and form for State-Subsidized Student Loans will be developed by the bank and Tencent, as an effort to improve the loan approval efficiency and shorten the disbursement process in China. (Source: 01caijing)
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ChinaPnR International Cooperates with South Korean Platform TST to Launch Tuition Payment Service
ChinaPnR International, a wholly-owned subsidiary of PnR Data Service, has announced to cooperated with South Korean tuition payment platform TST to launch cross-border tuition payment service for Chinese students.
TST is the largest tuition payment platform in South Korea, founded by Xingyue Group and South Korean payment and settlement company KSNET. So far, several South Korean universities (including Central University, Ewha Womans University, Dongguo University, Chongshi University, Chungbei University, North Korea University, Gwangju Women’s University, Dongxin University and Cottage University) have joined the cooperation.
ChinaPnR, established in 2006, is committed to provide fundamental service packages for new financial industries, covering 50% of P2P lending platforms as well as other new financial institutions such as third-party wealth management and private equity. That helps ChinaPnR create a new financial ecology with its partners. (Source: finance.ifeng)
Chinese P2P lender Dianrong scores $220m funding led by Singapore’s GIC
On August 2, Chinese P2P lending platform Dianrong announced Series D round funding of US$220 million from leading global investment funds. The funding was led by GIC Private Limited, Singapore’s sovereign wealth fund, along with CMIG Leasing, Simone Investment Managers, and other institutional and individual investors.
Soul Htite, Founder and CEO of Dianrong, said, Dianrong is humbled and honored to welcome GIC, CMIG Leasing, and Simone Investment Managers, to the Dianrong family. The addition of these distinguished global investors not only validates our past successes, but reinforces the commitment to “The New Finance”, which applies fintech to deliver greater financial freedom to Chinese families and small businesses. This latest capital injection will help Dianrong expand and accelerate these efforts and further drive sustainable and profitable business growth.
Founded in 2012, Dianrong offers loan origination, investment products and marketplace lending solutions. The company claims that it originates US$500 million in loans each month for four million retail lenders.
Last month, it acquired Quark Finance, a Chinese consumer finance and risk management company, to expand its local footprint across China. This March, the start-up also partnered with Hon Hai Precision Industry Co., Ltd. to launch Chained Finance, the first blockchain platform for supply chain finance in China. (Source: finance.sina)
China’s Central Bank to Regulate Rapidly Growing Fintech
In a report released last weekend, the People’s Bank of China said some financial products offered through internet channels by fintech companies are “systemically important” and hence will be included in its macro-prudential assessment or MPA.
The aim is to prevent cyclical risks and cross-market risk transmission, it said. Big players in the third-party payment services market and the peer-to-peer or P2P lending market are likely to be included first.
Previously, only big financial institutions, such as banks, brokerages and insurers, who play leading roles in their respective sectors, were regarded as “systemically important” and were included in the MPA framework. Their debt-to-asset ratio, liquidity, pricing, asset qualities, debt risks and lending policies are assessed by the central bank.
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Considering the definition of “systemically important” services and the market size of all fintech businesses, third-party payment services and P2P lenders are most likely to become the first to be regulated under the MPA framework. Meanwhile, the movement of PBOF is a significant sign for the fintech market because regulation indicates recognition of importance, and MPA, a mid-to long-term regulation framework, indicates that short-term risks are well handled. (Source: finance.china)
JD Finance Issues Blockchain based ABS Product to Finance Car Loans
Earlier this year, JD Finance announced to launch a blockchain based assets management system, which would be operated within JD Finance’s Assets Cloud Factory, and consumer finance companies were first to settle in the Assets Cloud Factory. On August 4, JD Finance announced issuance of the first blockchain-based ABS product of car financing in China. Based on IBM Fabric1.0, the product is jointly developed by Credit-first Capital, ZRobot and Goldenstand. The product contains private equity ABS for personal car rental. The adoption of blockchain technology provides operation transparency for the asset, which greatly enhance the efficiency, safety and traceability of the product.
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As per the report, blockchain is adopted to solve the trust issue. Features like decentralized storage, asymmetric secret key and consensus algorithm are introduced. JD Finance also test some new features by adding some “adaptive modifications”. Attacks on the network protocol is simulated on the security lab of JD Finance to ensure the safety of the network and the protocol. The consortium blockchain could process up to million TPS scale. Big data and AI technology developed by JD Finance is also integrated in the program. Authority hierarchy and asymmetric encryption are deployed to ensure information security. (Source: finance.ifeng)
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