Tencent Under the Gun As People’s Bank of China Targets Its Security
When a country’s central bank takes an interest in your mobile payments platform, it’s got to be the kind of thing that leaves one’s heart in one’s throat. That’s what happened recently as the People’s Bank of China (PBOC) took an interest in Tencent Holdings, and the news wasn’t good as the PBOC suggested that Tencent hasn’t been living up to expectations when it comes to security regulations.
The investigation began after PBOC received a complaint from lawyer Wang Yujia of the Beijing Yingke law firm in Shanghai, claiming that Tencent’s messaging app hasn’t put in place a set of requirements that require mobile payment systems to ensure people are using real names on payment accounts. Additionally, as of July 1, accounts are supposed to be categorized by payment limits and authentication measures used, a point Tencent has also been alleged to have not yet put in place.
Tencent, for its part, wasn’t commenting on either the complaint or the PBOC’s investigation. It’s also worth noting that reports suggest the PBOC was set to issue incentives for those who blew the whistle on violations of payment and settlement rules. Since Wang has previously served as legal counsel for a peer-to-peer lending company, it’s a safe bet that he understands the rules as presented. Wang commented “Everybody’s WeChat account is a payment account. If Tencent violates the law like this, we cannot help asking how could they guarantee the security of the users’ money.”
With a huge number of users—WeChat has 762 million monthly users active alone—it’s easy to see how this could be a major problem. By like token, with incentives potentially involved from a central bank, it wouldn’t be difficult for someone to suspect the worst of the accuser. This is why the PBOC investigation is so important: to determine the truth of the matter and potentially protect better than three quarters of a million people involved.
Hopefully the PBOC investigation won’t take long, if for no other reason than to clear up the uncertainty now surrounding one of the most popular mobile payment applications in China.