China Looks to Regulate Mobile Payments and Crowdfunding

The Chinese government is looking to crack down on mobile payments and crowdfunding in an effort to control more online commerce.

Although largely unreported in the west, Chinese site CNStock is reporting about new efforts by the Chinese government to have regulators more involved in peer-to-peer lending, crowdfunding, and mobile payment services.

All of these have seen massive growth throughout China, and already several governments within China—most notably the Shanghai city government—have adopted mPayment solutions and made them available for citizens.

People’s Bank of China Head of Legal Affairs Zhang Tao has been quoted saying that the PBOC, alongside the China Banking Regulatory Commission and two other government agencies, will have a hand in controlling and regulating internet payments throughout China.

Details remain scarce, and it is unclear whether foreign payment providers will be forced to comply—although the point is rather moot, since no foreign mPayment provider has a significant foothold in China, where Alibaba and Tencent have been fighting for control over the exploding Chinese online payment market.

This is not the first time rumblings of regulations against mPayments in China. Back in 2013, the government drafted regulation on mPayments, although much of those rules had to do with licensing and establishing mPayment technologies. The most recent wave of regulations seems to be presented as an attempt to combat fraud.