China Imposes First Fine on Nonbank Payment Provider Under Stricter Regulation

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The new regulations on the supervision and administration of nonbank payment institutions put the country’s nonbank payment industry under closer scrutiny. Photo: VCG

Chinese nonbank payment company Zhejiang Aerospace Electronics Information Industry Co. Ltd. has been fined 28.3 million yuan ($3.9 million) for a slew of violations — the first penalty levied against this type of company since new rules on supervising such institutions took effect on May 1.

The firm, a subsidiary of cross-border payment provider Hangzhou PingPong Intelligent Technology Co. Ltd., racked up eight violations, half being noncompliance with China’s anti-money laundering rules, according to a notice issued by the People’s Bank of China (PBOC) on Friday.

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Zhejiang Aerospace Electronics was fined 28.3 million yuan for eight violations, mainly noncompliance with anti-money laundering rules.
The fines follow new regulations for supervising nonbank payment institutions effective May 1.
Additional penalties included confiscation of 16 million yuan, and separate fines for two former executives.

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Who’s Who

Zhejiang Aerospace Electronics Information Industry Co. Ltd.: Zhejiang Aerospace Electronics Information Industry Co. Ltd., a subsidiary of Hangzhou PingPong Intelligent Technology Co. Ltd., has been fined 28.3 million yuan ($3.9 million) for eight violations, including noncompliance with anti-money laundering rules. This is the first penalty since new regulations took effect on May 1, aiming to enhance supervision of nonbank payment institutions in China. The company also had around 16 million yuan in illegal gains confiscated, along with penalties for two of its former executives.

Hangzhou PingPong Intelligent Technology Co. Ltd.: Hangzhou PingPong Intelligent Technology Co. Ltd. is a cross-border payment provider. Its subsidiary, Zhejiang Aerospace Electronics Information Industry Co. Ltd., has been fined 28.3 million yuan for various violations, including noncompliance with anti-money laundering regulations. This fine marks the first penalty under new supervisory rules for nonbank payment institutions effective since May 1.

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What Happened When

May 1, 2024：: New rules on supervising nonbank payment institutions took effect.

Friday, June 2, 2024：: People’s Bank of China (PBOC) issued a notice that Zhejiang Aerospace Electronics Information Industry Co. Ltd. was fined 28.3 million yuan.

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