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PBoC issues administrative rules for bank card acquiring business
Jul 22, 2013

July 17th 2013 - In order to standardize the bank card acquiring business, guard against payment risk, protect the legitimate rights and interests of the general public, and promote the healthy development of the bank card market, the PBC recently released Administrative Rules for Bank Card Acquiring Business. (Hereinafter referred to as the Rules)

As an important regulatory arrangement for payment service market, the Rules are drafted for the purpose of respecting market and its long-term development and supporting the market to play a fundamental role in resource allocation. In order to establish a fair, orderly and open environment for market competition, and in accordance with the principle of promoting innovation and sound development, guarding against risks, safeguarding the legitimate rights and interests of all parties, the Rules have clearly defined the business operational rules and risk management requirements that market participants should follow in the acquiring business of bank cards. With 6 chapters and 54 articles, the document defines the content of bank card acquiring business and the application of the Rules, provides clear and strict regulatory rules for the risk management by acquiring institutions in the merchant qualification check, business inspection, transaction monitoring, information security, fund settlement, and etc.

First, effectively regulating the acquiring business and risk management from its core and touching the essence. The Rules include both the online acquiring business initiated from the internet channel and traditional offline acquiring business in the regulatory radar, apply the same regulatory standards to various categories of market players in the acquiring business, and demand the same risk management responsibility from them. Second, strictly regulating the merchant management by the acquiring institutions. The Rules clarifies the management requirement at the various stages, including reaching out to potential merchants, qualification check, agreement signing, file management, business training, and etc, and emphasizes the principles of establishing and practicing the real name system for merchants, and localizing the operation and management of the acquiring business. Third, defining the risk management requirement for the acquiring business. The Rules include regulatory requirements to manage hidden risks in the procedures such as risk rating of merchants, transaction monitoring, business inspection, the installation of business acceptance terminals, online payment interface management, the transmission of transaction information, fund settlement, error handling, business outsourcing, and etc. Fourth, defining rules on supervisory examination and penalty in the cases of violation.

The implementation of the Rules will lay a solid institutional foundation for regulating what the acquiring institutions do in their business operation, and cultivating a sound competitive environment in bank card market. It will further promote the healthy and sustainable development of the bank card market, and enhance the active role of bank cards in stimulating consumption and promoting economic growth.

 

Re-disseminated by The Asian Banker

Categories: Risk and Regulation
Keywords: PBoC



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