Strict supervision of the payment industry is becoming more and more normal
The Central Bank's Operation Management Department issued 178 million yuan fines to 6 payment institutions this year
● The frequent occurrence of fines reflects the fact that some third-party payment institutions emphasize development and neglect regulation, innovation and credibility, efficiency and safety, and performance and risk control; on the other hand, it shows that the current regulatory concepts of the regulatory authorities It is becoming clearer and clearer that it is necessary to "remove chaos" and "remove malaria with strong medicine"
● In the payment industry, the current "heavy money" fines are more reflected in two aspects. One is that there are many violations, not a single violation, and the combined punishment of multiple crimes leads to greater fines; the second is that there are more illegal gains, and the fines are based on confiscation. Illegal income and a certain multiple, the fine will be higher if the base is large
● In order for the payment industry to develop and integrate in an orderly manner, in addition to digitalization, it must also emphasize the rule of law, fairness, integrity, transparency, and inclusiveness, and create a kind of honesty and credibility, fairness and justice, multi-win sharing, inclusive and inclusive benefits , A clean and vigorous digital ecological environment
□ Our reporter Zhao Li
□ Intern Xing Yiming Guo Yuanqiao
On October 10, the Business Management Department of the People's Bank of China published an article "Strengthening the regulatory order and resolutely promote the stable and healthy development of the payment industry".
The article pointed out that since the beginning of this year, the People’s Bank of China’s Business Management Department has focused on “strict supervision and normalization” and has increased its investigation and punishment of payment institutions, issued warnings to 6 payment institutions, imposed a total of 178,377,500 fines, and imposed a total of 178,377,500 fines on 8 relevant persons in charge. A warning was given and a total fine of 2.422 million yuan was imposed.
Among them, Commercial Bank Credit Payment Service Co., Ltd. issued the largest fine among domestic payment institutions—nearly 116 million yuan.
Liu Junhai, director of the Institute of Business Law of Renmin University of China, believes that the frequent occurrence of fines reflects the reality of some third-party payment institutions that emphasize development and neglect regulations, innovation and integrity, efficiency and safety, and performance and risk control; On the one hand, it shows that the regulatory concepts of the regulatory authorities are becoming more and more clear. It is to "remove the chaos" and "remove the ills", such as confiscation of income and fines, through the responsibility of third-party payment institutions from legal persons and individuals. Penalties such as accountability all reflect the concept of strict supervision, legal supervision, fast supervision, diligent supervision and transparent supervision.
Each of the four institutions fined more than ten million yuan
Increasing illegal costs is conducive to supervision
A reporter from the Rule of Law Daily checked the administrative penalty information on the website of the Business Management Department of the People's Bank of China and found that as of October 15 this year, the amount of fines imposed on payment institutions accounted for a relatively high proportion of the total amount of fines.
The 6 payment institutions that have been fined are listed in order of fines and forfeitures:
On April 29, Shangyinxin Payment Service Co., Ltd. was confiscated of its illegal income of 500,09974,71 million yuan, and fined 65,886,694,167 million yuan, with a total fine of 11,597,91,638 million yuan.
Lin Yao, then chairman of the Bank of China Payment Service Co., Ltd., was fined 450,000 yuan, and Zhang Yue, the director of the risk management department and senior risk control manager of the Bank of China Payment Service Co., Ltd., was fined 200,000 yuan.
On June 1, Beijing Sina Payment Technology Co., Ltd. was confiscated of its illegal income of 1,658,886,480 yuan, and fined 1,174,443,400 yuan, with a total fine of 1,884,831,888 yuan.
Bian Jiang, then general manager of Beijing Sina Payment Technology Co., Ltd., was fined 350,000 yuan.
On September 25, Yufu Payment Co., Ltd. confiscated 2,187,964 million yuan of illegal income, and imposed a fine of 12,347,962,400 yuan, with a total fine of 1,453,552,480 yuan.
Jiang Hongbo, deputy general manager of Yufu Payment Co., Ltd. and general manager of the online payment business department, was fined 288,000 yuan.
On January 17, Yinyingtong Payment Co., Ltd. confiscated 6.06933.22 million yuan of illegal income, and imposed a fine of 9.118,277.2 million yuan, with a total fine of 151.8762294 million yuan.
Two related persons in charge of Yinyingtong Payment Co., Ltd. were fined a total of 650,000 yuan.
On January 17, Kai Unicom Payment Service Co., Ltd. confiscated 3,996,368,19 million of its illegal proceeds, and imposed a fine of 9,806,368,19 million. The total fine was 13,802,736,38 million.
Two related persons in charge of Kailiantong Payment Service Co., Ltd. were fined a total of RMB 484,000.
On March 18, Beijing Fanxing Valley Information Technology Co., Ltd. was fined 30,000 yuan.
Comparing the data from previous months of the year, Liu Junhai analyzed to a reporter from the Rule of Law Daily that, from the perspective of punishment types, in addition to severely punishing ineffective anti-money laundering behaviors, the central bank has indeed shown strict enforcement and precise enforcement of penalties for payment institutions' acquiring violations.
"In fact, the supervision of the payment field has been the focus of supervision in the past three years. There are many incentives for this phenomenon. The first incentive is that relatively more pre-payment licenses are issued. In this process, payment institutions, especially Some third-party commercial payment institutions do have a lot of risks, including fund pool problems, payment channel problems, and anti-money laundering problems. In the process of strengthening third-party payment and payment management, many new policies and systems have been introduced in the past three years, including The classification of three-level accounts and payment management methods are actually a trend of normalization and strengthening of supervision." said Yin Zhentao, director of the Financial Technology Research Office of the Institute of Finance, Chinese Academy of Social Sciences.
After consulting relevant information, a reporter from the "Rules of Law Daily" noted that in the payment industry, the current "heavy" fines are more reflected in two aspects. One is that there are many violations of the law, not a single violation, and the combined punishment of multiple crimes results in a larger fine; Second, there are more illegal gains. The fines are based on the confiscation of illegal gains and a certain multiple. The fines will be higher if the base is large.
"Regulation through fines has a lot to do with payment institutions. Because many payment institutions are commercial institutions, and the reason why these institutions can operate or exist in the market is that it is completely dependent on illegal income. In this process, if it is severely punished and the illegal income is confiscated, it will increase the cost of illegality, produce a warning effect, and thus facilitate supervision." Yin Zhentao said.
There are many chaos in the payment industry
Prior regulatory loopholes must be closed
It is worth noting that traditional financial institutions such as banks, insurance companies, and brokerages are fined far less than payment institutions.
As of October 15, the Business Management Department of the People's Bank of China imposed penalties on 7 banks and 26 relevant persons in charge, with a total fine of 28.22 million yuan.
Among them, Beijing Rural Commercial Bank was fined the largest amount of 19.48 million yuan.
The Beijing Branch of Xiamen International Bank Co., Ltd. received the most fines, reaching 15 people.
One insurance company and one brokerage company were fined respectively. China United Life Insurance Co., Ltd. was fined 2.14 million yuan; Cinda Securities Co., Ltd. was fined 2.8 million yuan.
In this regard, Liu Junhai believes that it is precisely because of the many chaos in the payment industry, such as unfair competition, that traditional and formal financial institutions are relatively strict in anti-money laundering and risk control, but the newly established third-party payment institutions relying on the Internet have Develop business, attract more consumers, and sometimes relax risk control.
"In the past two years, the risk issues surrounding payment institutions have been more obvious. The first is that the amount of money is particularly large, and the other is that some new technologies are used to violate regulations, and risk prevention and control challenges have increased accordingly." Yin Zhentao further explained to the reporter of "Rules of Law Daily", Take the illegal behaviors on payment channels and channels as an example. For example, in the connection with the bank, some nodes are skipped; in addition, in terms of risk prevention and control, including payment risk prevention and control, technical security risk prevention and control, etc. Not in place.
From March to April 2020, The Paper published a series of investigation reports, continuously disclosing the existence of “no short-term naked deductions” and “routine deductions” in third-party payment institutions, as well as providing payment channels for gambling platforms, etc. Taking advantage of such chaos, many people reported that bank card funds were inexplicably deducted.
The criminal suspect opened a "withholding channel" at a third-party payment institution through a registered company. Without the cardholder’s knowledge, he secretly deducted the money in the victim’s bank card, and the payment interface of the third-party payment institution became a network The criminal channel of black and gray production, and the cardholder’s account balance can be quietly deducted.
On March 26, 2020, the Shenzhen Central Branch of the Central Bank imposed a fine of 61.24 million yuan on Shenzhen UBS Information Technology Co., Ltd.
At the time, this was the biggest fine issued by the central bank to third-party payment institutions.
Platforms such as Ju Complaint and Black Cat Complaint show that UBS, as a payment institution, has been complained hundreds of times.
From July 4, 2016 to April 8, 2020, there were 616 related complaints on Ju Complaints; from April 17, 2019 to March 24, 2020, there were 104 black cat complaints.
The content of the complaint includes the failure to receive the money after swiping the card through the POS machine, unauthorized swiping, deduction, and harassment of the payment.
On April 30, 2020, the central bank’s fines for payment institutions broke the fines record again with nearly 116 million yuan issued to Commercial Bank Credit Payment Service Co., Ltd.
Why are there frequent chaos in payment institutions?
Liu Junhai summarized three reasons:
First, some payment institutions emphasize development and neglect standards, efficiency and fairness, innovation and credibility, efficiency and safety, and even see profits and forget justice.
Second, there are loopholes, blind spots and even vacuum areas in supervision.
From a side point of view, that is to say, the regulatory system, framework and methods based on traditional payment institutions are no longer suitable for the latest business models under the development of new third-party payment institutions in the Internet era.
Third, the counterparty of the transaction, especially consumers, lacks the necessary means of self-protection.
Some netizens are easily deceived by the one-sided propaganda of some payment institutions' websites, and may be deceived, thereby infringing on the right to know, the right to choose, the right to fair trade, and the right to security.
In Liu Junhai’s view, the delay in supervision is particularly noteworthy. “At present, almost all supervision is carried out after the fact. If you find out and then punish it, you can’t prevent it in advance. This is actually the biggest loophole. Should the regulatory authorities also reflect on the loopholes in prior supervision? Where? If the payment system is insecure, why can licenses be issued? At present, administrative licensing and administrative supervision are "two skins". Licenses are issued to control licenses. Regardless of supervision, those who engage in penalties cannot control licenses."
Stop willful development and disorderly integration
Firmly hold the bottom line of financial security
On September 24, at the 9th China Payment and Settlement Forum, Liao Jinrong, director of the International Cooperation Bureau of the Ministry of Public Security, said that the Central Bank and the Ministry of Public Security have established a mechanism for checking gambling clues, and issued 115 million yuan to cross-border gambling payment institutions. The biggest ticket in history.
He also said that China's annual outflow of cross-border gambling funds exceeds one trillion yuan, and there are many regulatory loopholes in payment institutions and virtual currencies.
According to Yin Zhentao, many cross-border methods and methods for funds, including some apps, or some technical applications of financial technology, "are for the detection of violations of laws and regulations, the detection of risks, the control of the flow of funds, and even the entire supervision. It has caused great difficulty."
According to the China Times, there is still room for salvation for common problems in some industries, such as companies actively cooperating in rectification.
Behaviors involving gambling, money laundering, and illegal fund-raising are the most serious types of violations in fines. Once payment institutions become tools for these illegal industries, they are equivalent to hitting the regulatory red line and will be severely punished.
This is also reflected in the fine from the Business Management Department of the People's Bank of China.
For example, the Bank of China Payment Service Co., Ltd. that received a fine of more than 100 million yuan was involved in directly providing payment and settlement services for illegal fund-raising platforms.
"The drug-related clue verification mechanism established by the Central Bank and the Ministry of Public Security is very good. Because there are still many loopholes in the existing regulatory network, such as gambling payments, especially when it involves cross-border, it is more prone to problems, and the amount of cross-border settings exceeds 10,000. 100 million yuan, the amount involved is already quite large, so this is also a big loophole in financial security, and systemic financial risks must not be underestimated." Liu Junhai said, in addition, many people even think that virtual currency is data. The most shining jewel in the crown of wealth of the times, "So some young people are obsessed with virtual currency development and trading. In fact, this not only causes major systemic financial security risks, but also breeds systemic financial risks. It will encourage the unhealthy ethos of getting something for nothing and the formation of a business model that is free from the law. In addition, it does not rule out that some investors and consumers who do not know the truth participate in the process and suffer serious losses."
Yin Zhentao also mentioned the issue of virtual currency to a reporter from the Rule of Law Daily. "In fact, a large number of payment institutions are indeed doing the export and input of virtual currency funds. According to the central bank’s management regulations, Chinese people cannot invest in virtual currencies, but why are there a large number of them? Can virtual currency exist? It means that money is laundered overseas through third-party payment methods, and even with the support of third-party payment methods, virtual currency transactions and sales in China provide some methods for illegal crimes. In addition, many telecommunication frauds are also Remaining funds overseas and gambling are all extensions of this illegal behavior."
The Business Management Department of the People's Bank of China stated that compliance management is the bottom line and the most basic requirement for the existence of payment institutions, and it is also the cornerstone of the healthy development of the payment industry.
Compliance is supported, and violations will be severely punished.
Strengthening supervision, maintaining high pressure on violations of laws and regulations, and continuously increasing the cost of violations, is conducive to the healthy development of the payment industry, is conducive to maintaining the seriousness of regulations and supervision, and is conducive to protecting the legitimate rights and interests of financial consumers.
As strict supervision becomes the norm, payment institutions will inevitably pay more attention to compliance issues.
On September 24 this year, Fan Yifei, deputy governor of the central bank, said in a speech at the 9th China Payment and Settlement Forum that although the digital development of the payment industry has the characteristics of integration and intelligence, it is by no means a willful development or disorderly integration. It must be adhered to. Safe bottom line.
Liu Junhai’s interpretation of this safety bottom line is that the People’s Bank of China Law and other relevant laws stipulate the basic bottom line of financial systemic safety, that is, no systemic financial risks or risk spillovers can occur; no financial consumers and investors can be harmed Rights and interests; must not violate relevant laws and regulations on financial security, including anti-money laundering; in addition, they must not be involved with criminal groups or perpetrators cracked down by the criminal law and provide them with financial convenience.
“Specifically, the Criminal Law and the People’s Bank of China Law protect systemic information security, the credibility of the renminbi as a legal currency, the legitimate rights and interests of consumers and financial consumption investment, the safety of citizens’ personal private property rights, financial security, and financial consumer investors’ Information security." Liu Junhai said. In short, the security of personal private property, corporate markets, and state-owned assets has a bottom line. In addition, with the continuous development of technology, there is another noteworthy systemic technical security.
In Liu Junhai’s view, if the payment industry wants to achieve healthy development and orderly integration in the future, in addition to digitalization, the rule of law, fairness, integrity, transparency, and inclusiveness must also be emphasized. It is necessary to create a kind of honesty, credibility, fairness and justice. A digital ecological environment with win-win sharing, inclusiveness and inclusiveness, and a clean and virtuous environment.
"Specifically, we must start with optimizing the ecological environment. The key is to deepen reforms, promote development, maintain stability, build harmony, build consensus, eliminate differences, and better complete the'six guarantee tasks'. The key is to deepen reforms, promote development, maintain stability, build harmony, eliminate differences, and better complete the'six guarantee tasks'. The ultimate realization of the payment industry Coordinated development with the real economy, to reverse the abnormal phenomenon of deviating from reality to virtual, and even risk spillover, and to better optimize a stable, transparent, fair and predictable legal business environment." Liu Junhai said.