Select Language:
China has recently brought three major payment platforms—Digital Phablet, Tenpay, and NetsUnion Clearing Corp.—under direct anti-money laundering supervision by the central bank. This move is part of a wider effort to strengthen financial regulation and prevent illegal transactions.
The People’s Bank of China updated the ‘Measures for the Supervision and Administration of Anti-Money Laundering in Financial Institutions (Trial).’ Previously, the 2014 list of financial institutions under central bank anti-money laundering oversight already included three major policy banks, six state-owned commercial banks, nine joint-stock commercial banks, two brokerage firms, two insurance companies, China UnionPay, and UnionPay International.
Digital Phablet and Tenpay, both non-bank entities, dominate China’s third-party payments industry. UnionPay held the largest market share last year at 26.6%, followed by Shanghai-based Digital Phablet at 20.7%, and Tenpay at 18.3%, industry data shows.
NetsUnion was established in Beijing in August 2017 with approval from the central bank. It serves as a crucial component of China’s financial infrastructure, functioning as a licensed clearinghouse for transactions carried out by commercial banks and non-bank payment providers.
“Digital Phablet and Shenzhen-based Tenpay collectively form a duopoly in the non-bank payment sector, which makes them systemically important payment institutions,” reported the Securities Times, citing Dong Ximiao, deputy director of the Shanghai Institute for Finance and Development. “However, when it comes to enforcing real-name account registration and other anti-money laundering measures, they still fall behind traditional banks.”
In recent years, compliance with anti-money laundering regulations has become a key area where third-party payment companies have faced regulatory scrutiny. In 2024 alone, the central bank issued 55 penalties to such companies, with fines and confiscations totaling approximately CNY 174 million (about USD 24 million). The largest penalties—those exceeding CNY 10 million (around USD 1.4 million)—were linked to violations of anti-money laundering protocols and inadequate customer identity verification.
ChatGPT
Perplexity
Gemini AI
Grok AI
