Chart of the Day: Online Payment Firms Are Banking More Client Funds
Online payment firms’ deposits of client funds hit a new high in August as the central bank has ramped up regulation of the burgeoning mobile payment industry.
Nonfinancial institutions’ outstanding deposits — the client funds that third-party payment firms must deposit with a centralized custodian — rose 19.1% in August from the previous month to 763.84 billion yuan ($111.42 billion), according to the latest data (link in Chinese) from the People’s Bank of China (PBOC).
The PBOC announced in June that nonbank payment firms need to gradually raise the ratio of client reserve funds under centralized deposit. They have until Jan. 14 to deposit 100% of their client fund reserves.
The move comes as part of the central bank’s broader efforts to clamp down on financial risk as more and more money flows into China’s two mobile payment giants, Alipay, an affiliate of Alibaba Group Holding Ltd., and Tencent Holdings Ltd.’s Tenpay.
China’s mobile payment platforms handled 202.9 trillion yuan in 2017, according to the Ministry of Industry and Information Technology.
Contact reporter Charlotte Yang (email@example.com)
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