Shanghai UnionPay Electronic Payment and Oriental Paytech Fined for Violating Merchant ManagementRegulations
Shanghai, China – September 9, 2024 – Two Shanghai-based payment institutions, Shanghai UnionPay Electronic Payment Service Co., Ltd. (Shanghai UnionPay Electronic Payment) and Oriental Paytech Information TechnologyCo., Ltd. (Oriental Paytech), have been fined by the People’s Bank of China (PBOC) Shanghai Branch for violating merchant management regulations.
Shanghai UnionPay Electronic Payment, a domestic third-party payment institution and internet company with its own unified payment gateway, was established in July 1999. It is wholly owned by UnionPay Commerce. In August 2011, the company obtained a Payment Business License from the PBOC, allowing it to engage in internet payment and mobile phone payment services. Following the adjustment of payment business categories, Shanghai UnionPay Electronic Payment’s business type was changed toType I Stored Value Account Operation.
According to public information, on June 27, 2022, Shanghai UnionPay Electronic Payment’s 100% equity was put up for sale on the Shanghai United Property Rights Exchange, with a price tag of 555.35million yuan. However, the progress of the equity transfer remains unknown.
Oriental Paytech, a third-party payment institution under China Baowu Steel Group, is a state-owned company that was officially established in March 2011. The same year, it received a Payment Business License from the PBOC, allowing it to engage in internet payment services. Oriental Paytech primarily provides comprehensive electronic payment services for e-commerce businesses in the steel and related industries. Following the adjustment of payment business categories, Oriental Paytech’s business type was also changed to Type I Stored Value Account Operation.
The PBOC ShanghaiBranch announced the administrative penalties, stating that Shanghai UnionPay Electronic Payment was given a warning and fined 20,000 yuan. Oriental Paytech was fined 60,000 yuan and had 400,000 yuan of illegal gains confiscated.
The specific violations that led tothe penalties were not detailed in the announcement. However, the PBOC Shanghai Branch’s actions highlight the importance of compliance with merchant management regulations for payment institutions.
Implications for the Payment Industry
The penalties imposed on Shanghai UnionPay Electronic Payment and Oriental Paytech serve as a reminder to all payment institutions inChina to prioritize compliance with regulations. The PBOC has been actively cracking down on violations in the payment industry, particularly those related to merchant management.
This recent case also underscores the importance of robust risk management practices within payment institutions. By failing to comply with merchant management regulations, both Shanghai UnionPay Electronic Payment and OrientalPaytech exposed themselves to significant financial and reputational risks.
Looking Ahead
The payment industry in China continues to evolve rapidly, with increasing competition and innovation. However, as the PBOC’s actions demonstrate, compliance with regulations remains a critical factor for success. Payment institutions must prioritize compliance and risk management toensure long-term sustainability and growth.
Note: This news article is based on the provided information and publicly available data. It is important to consult official sources for the most up-to-date information and details on the specific violations that led to the penalties.
Views: 0