There are no bugs on Prime Day! Your payment collection may be in trouble

During this meeting, the central bank once again stressed the importance of cross-border payment business licenses and stated

Simply put, any third-party institution that has not obtained a domestic payment license is considered to be operating without a license.

Although various payment companies usually use various licenses to promote themselves, our domestic regulatory authorities only recognize one, which is the cross-border payment license issued by the State Administration of Foreign Exchange.

Foreign cross-border payment companies such as Paypal and WF hold many licenses, but they do not have the Chinese license. Other third-party payment institutions such as PingPong, Payoneer, and Airwallex were also interviewed for the same reason.

Pingpong immediately took the lead in responding, saying that it would firmly uphold the latest regulatory framework of the central bank (of course, this is the only way)

Are these unlicensed institutions that have been interviewed going to be out of business? Do we sellers need to change payment methods immediately?

Don’t panic. Being interviewed sounds like a serious matter (and it is for those organizations), but the impact on us sellers is not that exaggerated. Also, because we cannot easily change the payment method, we should treat this issue more carefully.

First, sellers who use PayPal, WF and P card, these established overseas third-party payment institutions, although they do not have domestic licenses, but their overseas business is huge and the licenses are complete, so security issues are not big. Especially WF, which has become a wholly-owned subsidiary of Alipay, does not have to worry about this problem at all.

Then there are companies like Pingpong and AirConnect that hold foreign licenses but mainly operate in China. Their security level is not as good as the former, but sellers do not need to take too many actions before further news comes out.

Because payment is a highly regulated industry in any country, even if payment companies give up, they cannot run away with the money like p2p. We have a case right now, what will happen to payment institutions that give up cross-border business.

The above is that last week, Dingfu Gleebill officially announced that it would give up the collection business in areas other than the United States, and notified sellers to change the collection account. So if the payment institution gives up the cross-border business, it will give sellers enough time to respond, and we don’t have to worry too much about this issue now.

As to whether Dingfu’s abandonment of the collection business is related to this interview, we will not speculate. We can only say that the tightening of policies in the cross-border payment industry is not a matter of one or two days.

If the payment institution that was summoned wants to resolve the situation of operating without a license, it of course needs to apply for a payment license.

However, it is very difficult to apply for this license. Pingpong and WF (before being acquired by Alipay) have also submitted multiple applications to the central bank, but all of them fell on deaf ears. Even such a large payment institution cannot get it, which shows how difficult it is to apply for a license.

Another way is to acquire/merge a licensed institution, or to be acquired by a licensed company like WF.

The list of institutions currently holding cross-border payment licenses is as follows:

No matter how these institutions choose to respond in the end, there is no need to rush to change the payment method before your payment platform issues a notice. After all, KYC audits are still quite disgusting.

After some time of crazy promotion of various 0-fee rates by third-party payment companies, it is a good thing that this industry is now facing strict supervision. After all, everyone’s wallet is the most important. We can’t have a huge success on Prime Day and then fail at the last link.

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