The online payment industry in China will become more regulated, with the central bank ordering third-party payment institutions to connect to a newly established unified platform by June 30 in 2018.
The unified platform refers to an online payment clearing platform for non-banking payment institutions.
At present, online payments made via third-party payment tools such as Alipay and WeChat Pay are completed directly between such providers and banks, bypassing the clearing system of the People's Bank of China.
This situation has caused some risks for the industry.
The PBC can't supervise illegal activities such as money laundering and illicit money transfers that are conducted through online payments via the third-party payment tools.
The platform will enable the PBOC to better supervise capital flows via the third-party payment companies, which will help the industry over the long term, Huang Yue, an analyst from internet service consultancy iResearch.
Transactions involving third-party online payments rose 56.1% in the first quarter of 2017 year-on-year to 6.4 trillion yuan, according to a report iResearch released in July.