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April 30, 2021
On the web
China Warns Large Tech Firms As Industry Faces Rising Oversight
Wall Street Journal
“China is reining in the ability of the country’s internet giants to use big data for lending, money-management and similar businesses, ending an era of rapid growth that authorities said posed dangers for the financial system. On Thursday, China’s central bank and other regulators ordered 13 firms, including many of the biggest names in the technology sector, to adhere to much tighter regulation of their data and lending practices.”
April 6, 2021
Top Post
China Creates Its Own Digital Currency, a First for Major Economy
Wall Street Journal
“A thousand years ago, when money meant coins, China invented paper currency. Now the Chinese government is minting cash digitally, in a re-imagination of money that could shake a pillar of American power. It might seem money is already virtual, as credit cards and payment apps such as Apple Pay in the U.S. and WeChat in China eliminate the need for bills or coins. But those are just ways to move money electronically. China is turning legal tender itself into computer code. Cryptocurrencies such as bitcoin have foreshadowed a potential digital future for money, though they exist outside the traditional global financial system and aren’t legal tender like cash issued by governments. China’s version of a digital currency is controlled by its central bank, which will issue the new electronic money. It is expected to give China’s government vast new tools to monitor both its economy and its people. By design, the digital yuan will negate one of bitcoin’s major draws: anonymity for the user.”
March 1, 2021
On the web
China Charges Ahead With a National Digital Currency
The New York Times
“Annabelle Huang recently won a government lottery to try China’s latest economics experiment: a national digital currency . After joining the lottery through the social media app WeChat , Ms. Huang, 28, a business strategist in Shenzhen, received a digital envelope with 200 electronic Chinese yuan, or eCNY, worth around $30. To spend it, she went to a convenience store near her office and picked out some nuts and yogurt. Then she pulled up a QR code for the digital currency from inside her bank app, which the store scanned for payment.”
China Fintech Curbs That Hit Ant Were No Surprise: Ping An
Bloomberg
“China’s curbs on fintech that thwarted a massive stock sale by Ant Group Co. have been under consideration for years and weren’t a surprise to those in the industry, according to an executive at China’s biggest insurer by market value. Like Ant, Ping An Insurance (Group) Co. was in the midst of planning a public listing for a fintech unit when regulators began issuing a flurry of rules to contain the country’s burgeoning online lending industry.”
February 8, 2021
On the web
Chinese Consumers Now Make Three Mobile Payments Every Day
NFCW
“Chinese consumers made an average of three mobile payments a day during 2020, while 98% of the Chinese population consider mobile payments to be their most frequently used transaction method, an increase of five percentage points on last year, a new survey reveals. The number of consumers making mobile payments using a QR code also rose to 85%, up six percentage points on 2019.”
China Issues New Anti-monopoly Rules Targeting Its Tech Giants
Reuters
“China’s market regulator released new anti-monopoly guidelines on Sunday that target internet platforms, tightening existing restrictions faced by the country’s tech giants. The new rules formalise an earlier anti-monopoly draft law released in November and clarify a series of monopolistic practices that regulators plan to crack down on.”
January 20, 2021
On the web
China Plans Tougher Antitrust Rules for Non-bank Payments Industry
Reuters
“China’s central bank has proposed stepping up antitrust measures for companies in the non-bank payments industry, such as Ant Group’s Alipay and Tencent’s WeChat Pay. Under draft rules proposed on Wednesday, 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”.”
January 19, 2021
On the web
TikTok Owner ByteDance Launches Douyin Pay, Mobile Payment Service for China
Reuters
“Beijing-based ByteDance recently launched its own third-party payment service for Douyin, the Chinese version of its hit short video app TikTok, as it presses to expand into the e-commerce business in China. “The set-up of Douyin Pay is to supplement the existing major payment options, and to ultimately enhance user experience on Douyin,” Douyin said in a statement to Reuters on Tuesday.”
January 14, 2021
On the web
PayPal Becomes First Foreign Firm in China With Full Ownership of Payments Business
Reuters
“PayPal Holding Inc has become the first foreign operator with 100% control of a payment platform in China, according to Chinese government data, as the U.S. fintech giant eyes a bigger foothold in a booming market for online payments. PayPal acquired the 30% stake it doesn’t already own in China’s GoPay, formally known as Guofubao Information Technology Co., on Dec. 31, 2020, according to shareholder data from the National Enterprise Credit Information Publicity System.”
December 23, 2020
On the web
Jack Maâs Ant Group Slashes Credit Limits for Some Younger Borrowers in China
Wall Street Journal
“The move signals that the fintech giant is dialing back risk in its lending business following pressure from Chinese regulators.”
December 21, 2020
On the web
WSJ News Exclusive | Jack Ma Makes Ant Offer to Placate Chinese Regulators
Wall Street Journal
“The offer, not previously reported, appeared a mea culpa of sorts from Mr. Ma as he found himself face to face with officials from China’s central bank and agencies overseeing securities, banking and insurance. The Nov. 2 meeting took place a few days before Ant was supposed to go public, in what would have been the world’s biggest initial public offering.”
December 15, 2020
On the web
China central bank urges wider acceptance of cash as payments go digital
Reuters
“China’s central bank has called for wider acceptance of cash in economic activities and vowed to punish those who refuse to accept cash payments in the wake of a widening gap in access to digital services. China’s online payments via barcodes and third-party payment apps such as Ant Group’s Alipay and Tencent Holdings’ Tenpay have gained in popularity over the years on government policies to promote innovation.”
December 9, 2020
On the web
China Hails Victory in Crackdown on Peer-to-Peer Lending
Wall Street Journal (paywall)
“China has declared victory in its campaign against online peer-to-peer lenders, a risky financing sector that has been zeroed out, a top banking regulator said this week. Peer lenders gather funds from small investors and loan them out to small businesses and individuals. At first loosely regulated, they were seen as a financial innovation serving parts of the Chinese financial system that were ignored by state-backed banks. But a wave of scandals and defaults in 2018 prompted authorities to crack down.“
December 8, 2020
On the web
China regulator puts country’s fintech giants on notice hinting at more rules
CNBC
“China’s top banking regulator on Tuesday questioned the power of the country’s large financial technology companies and hinted at “timely and targeted measures to prevent new systemic risks.” The move appears to be a nod toward more regulations in China’s burgeoning fintech sector. Over the past few months, Chinese regulators have been growing increasingly concerned about the size of its technology giants and have proposed draft rules to regulate areas including data use and antitrust.”
November 18, 2020
On the web
Chinese shoppers are willing to spend more money, says CEO of Alibaba’s InTime department store chain
CNBC
“In the aftermath of the coronavirus pandemic, China’s consumers are spending less time on the shopping process — but they’re spending more money than before, according to a CEO of an Alibaba -owned company. Chinese shoppers are particularly willing to pay a lot of money on luxury goods and cosmetics, Chen Xiaodong, CEO of InTime, said Tuesday.”
October 28, 2020
On the web
Don’t Even Try Paying Cash in China
New York Times
“It’s hard for those of us who live outside of China to grasp how paying for everything has gone digital in the country. Most businesses there, from the fanciest hotels to roadside fruit stands, display a QR code — a type of bar code — that people scan with a smartphone camera to pay with China’s dominant digital payment apps, Alipay and WeChat. Paying by app is so much the norm that taxi drivers might curse at you for handing them cash . My colleague Ray Zhong , who used to live in Beijing and wrote about Alipay’s parent company selling stock to the public for the first time , spoke with me about how China’s digital payment apps created new kinds of commerce, and whether China offers a glimpse at a cashless future for the rest of us.”
October 7, 2020
On the web
U.S. Explores Curbs on Ant Group, Tencent Payment Systems
Bloomberg (paywall)
“The Trump administration is exploring restrictions on billionaire Jack Ma’s Ant Group as well as Tencent Holdings Ltd. over concerns that their digital payment platforms threaten U.S. national security, according to people familiar with the matter, a move that risks infuriating China and disrupting what could be the world’s largest initial public offering.”
September 4, 2020
On the web
China’s ByteDance buys UIPay to leverage e-payment capabilities at home
Reuters
“ByteDance, the owner of popular short-video app TikTok, said it has acquired a Chinese third-party payment service UIPay in a bid to leverage its domestic payment capability…Established in 2012, UIPay obtained a third-party payment license from China’s central bank in 2014. There were reports of ByteDance acquiring UIPay in 2018, but ByteDance had downplayed the news and said the two were only business partners.”
August 18, 2020
On the web
China’s Ant Group plans consumer finance firm in growth push ahead of IPO
Reuters
“Ant Group, Alibaba’s fintech arm and China’s dominant mobile payments company, plans to set up a consumer finance firm in the southwestern city of Chongqing, expanding its presence in the fast-growing domestic business, two sources told Reuters. The move underlines a broader push by Ant and other Chinese tech majors, including Tencent and Bytedance, to bulk up in financial services closer to home as they battle mounting scrutiny for their technology business overseas and a worsening Sino-U.S. standoff.”
Beijing clamps down on QR code mobile payments at gas stations despite a negligible chance of an explosion
South China Morning Post
“An experiment carried out by experts revealed that when scanning QR codes, a smartphone emits stronger electromagnetic radiation than during phone calls, according to a social media post from China’s Fire and Rescue Department. The experts concluded that QR code scanning is potentially dangerous at gas stations. While static electricity can ignite petrol vapours, there is scant evidence that phone-induced explosions are likely to occur near gas pumps.”
August 14, 2020
On the web
China to Expand Testing of a Digital Currency
Wall Street Journal (paywall)
“China’s Commerce Ministry said it would expand a pilot program for its digital currency to include a number of large cities, advancing a pioneering initiative by a major central bank to launch an electronic payment system. The digital currency pilot program will cover much of China’s most prosperous regions, the Commerce Ministry said Friday: the capital Beijing and nearby Tianjin and Hebei province in the north; the Yangtze River Delta to the south; and, along China’s wealthy southern coast, Guangdong province and the neighboring cities of Hong Kong and Macau.”
July 31, 2020
On the web
China’s Central Bank Urges Antitrust Probe Into Alipay, WeChat Pay
Reuters
“China’s top antitrust agency is looking at whether to launch a probe into Alipay and WeChat Pay, prompted by the central bank which argues the digital payment giants have used their dominant positions to quash competition, sources with knowledge of the matter said.”
July 8, 2020
On the web
China to Test Sovereign Digital Currency on Ride Hailing Giant Didi
Reuters
“China’s central bank is partnering up with Didi Chuxing to test the use of its digital currency, which could make China’s dominant ride hailing platform one of the world’s first’s corporate users of a government-created virtual currency. The digital currency research unit of People’s Bank of China (PBOC) is working with Didi to apply digital currency electronic payment, or DCEP, on the ride hailing app, Didi said in a statement on Wednesday.”
June 17, 2020
On the wires
WeChat Pay to Support American Express Credit Card
“China’s tech giant Tencent announced on Tuesday that its WeChat Pay will support American Express RMB credit cards, coming soon. China’s central bank on Saturday announced that it had approved an application by American Express’ Chinese venture to conduct bank card clearing operations in the country.”
June 15, 2020
Top Post
American Express Receives Clearance to Begin Processing Local Transactions in Mainland China
“American Express announced today that its joint-venture in mainland China, Express (Hangzhou) Technology Services Company Limited (“Express Company”), has received approval from the People’s Bank of China (PBOC) for a network clearing license. With this, American Express becomes the first foreign payments network to be licensed to clear RMB transactions in mainland China. The company expects to begin processing transactions later this year.”
April 20, 2020
On the web
China Rolls Out Pilot Test of Digital Currency
Wall Street Journal (pay wall)
“China’s central bank has introduced a homegrown digital currency across four cities as part of a pilot program, marking a milestone on the path toward the first electronic payment system by a major central bank. Internal tests of the digital currency are being conducted in four large cities around China—Shenzhen, Suzhou, Chengdu and Xiong’an, a satellite city of Beijing—to improve the currency’s functionality, the digital currency research institute under the People’s Bank of China confirmed Monday, in response to a request for comment. Chinese domestic and state-run media outlets reported on the trials over the weekend. The trials followed years of research by the central bank dating back to 2014. The new currency, which doesn’t have an official name but is known by its internal shorthand “DC/EP,” or “digital currency/electronic payment,” will share some features with cryptocurrencies including bitcoin and Facebook Inc.’s Libra, PBOC officials have said. While it won’t boast the anonymity that bitcoin and other cryptocurrencies tout, China’s central bankers have vowed to protect users’ privacy.”
April 10, 2020
On the web
Chinese commuters can now use Apple Pay Express Transit nationwide with China T-Union cards
9to5Mac
“In China, Express Transit was already available in Beijing and Shanghai with integration with local transit cards. Now, a new partnership means Apple and China T-Union can cover a huge part of the region with Express Transit integration. China T-Union cards are accepted in 275 Chinese cities. Apple Pay-based travel is even more useful in current times as people try to reduce their amount of contact with public terminals and other people. We are still waiting for the promised Express Transit support to reach Octopus cards for Hong Kong travellers, and the Chicago transit system here in the United States.”
February 18, 2020
On the web
China Quarantines Cash to Sanitize Old Bank Notes From Virus
Bloomberg
“The government cut off the transfer and allocation of old bank notes across provinces, and between cities most affected by the deadly outbreak, according to Fan Yifei, People’s Bank of China’s deputy governor. The central bank also ramped up measures to sanitize old money to reduce contagion risks and added 600 billion yuan ($85.9 billion) of new cash for Hubei, the epicenter of the coronavirus, he said.”
December 9, 2019
On the web
China’s Central Bank Likely to Pilot Digital Currency in Cities of Shenzhen and Suzhou: Report – CoinDesk
CoinDesk
“The tests are likely to include the participation of state-owned partners. These comprise the “Big Four” commercial banks – the Industrial and Commercial Bank of China, Bank of China, China Construction Bank and the Agricultural Bank of China – and three telcos, China Telecom, China Mobile and China Unicom. The pilots will see the digital currency, dubbed digital currency electronic payment (DCEP), applied in real-world scenarios such as transportation, education and healthcare, Caijing says. Partner banks will be able to design their own trials scenarios for DCEP.”
November 26, 2019
On the web
China mobile payments maintain rapid growth in Q3
XinhuaNet
“China’s mobile payments continued fast growth in the third quarter of 2019, showed data from the central bank. Banks in the country processed 27.27 billion mobile payment transactions in the period, up 61.05 percent year on year, said the People’s Bank of China in a report. Value of these transactions increased by 31.52 percent from the same period of last year to 86.11 trillion yuan (about 12.2 trillion U.S. dollars). Meanwhile, online payment transactions by the non-banking institutions were valued at 63.99 trillion yuan in Q3, up 23.04 percent year on year.”
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