Global Information Technology & Communications
Taiwan - Progress of Third-Party / Online Payment Legislation in Taiwan
On 4 September 2014, a draft bill, the Acts Governing E-Payment Institutions, was introduced to the Taiwan legislature for review (the “Draft Bill”), which is expected to lead to a more open environment for third-party / online payment services in Taiwan.
In the past, non-bank entitles have only been allowed to run very limited businesses (such as issuance of gift cards or virtual coins for their own products) with respect to electronic payment, as the authorities considered money collection without substantial transactions to be in the nature of a “deposit”, which can only be run by banks. Under the Draft Bill, non-bank entities (such as internet platform operators) will be allowed to run most of electronic payment business, including online stored value, money transfers between online accounts, as well as the O2O (Online To Offline) business. It can be expected that third-party / online payment services will be further available to consumers after the Draft Bill is passed.
To protect consumers, the current Draft Bill sets forth certain requirements for the e-payment institutions and the services they provide, such as securing prior government approval, setting up a capital threshold of NTD 300 million (about USD 9.8 million) and fixing of ceiling amounts for online stored value accounts and the amounts transferred between accounts. The current Draft Bill further requires offshore entities to obtain approval to run the electronic payment business in Taiwan.
It is reported that the Executive Yuan aims to put the Draft Bill into effect by the end of this year (2014). It is noteworthy to monitor the development of the Draft Bill, including whether there would be any changes to the aforementioned permitted business and the requirements for the e-payment institutions.
For more information, please contact Stephen Tan or Tzu-Chi Chiao.