Caixin
Dec 21, 2020 06:27 PM
FINANCE

Bribery Confession Sends Shockwaves Through Online Payment Sector

What’s new: A former central bank online payment regulator admitted in court earlier this month to accepting bribes, China’s top anti-graft agency said in a statement (link in Chinese) on Thursday.

Yang Biao, 56, worked for years at the payment and settlement regulation department of the People’s Bank of China’s (PBOC) Shanghai head office. He left the central bank in 2014 and afterward worked in senior roles at payment companies. He was put under investigation for “serious violations of law” at work in October 2019.

The Thursday statement didn’t disclose the amount of money involved in the bribes.

Why it matters: The case has sent shockwaves through China’s online payment sector, as potential misconduct involved occurred when the sector was still in its formative stages.

Most of the companies in Shanghai that looked to obtain payment licenses were linked to Yang, an experienced industry source said. Yang previously said at a meeting that companies that didn’t have a connection to the PBOC’s head office could go to him for license applications, a source with knowledge of the matter said.

What’s the background: The central bank started licensing third-party payment companies, many of whom process payments from online shopping, in May 2011. Currently, there are more than 230 such companies, with many based in Shanghai, official data show.

Read more: Former People’s Bank Online Payments Executive Falls Under Probe

Quick Takes are condensed versions of China-related stories for fast news you can use. To read the full Caixin article in Chinese, click here.

Contact reporter Tang Ziyi (ziyitang@caixin.com) and editor Marcus Ryder (marcusryder@caixin.com)

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