The People’s Bank of China published a Circular on the 21 March 2018 and announced the opening of non-financial institution e-payment services to foreign investors.
According to the Circular, if a foreign institution intends to provide electronic payment services for domestic and cross-border transactions of a party located within China’s territory, it should establish a foreign-invested enterprise in China. It must also obtain a payment service licence in accordance with the qualification requirements and approval procedures of the Administrative Measures for the Payment Services of Non-financial Institutions.
Specifically, the foreign-invested payment institution must have their business and disaster recovery systems within China. The systems must be secure, compliant and have the capability of processing payment services independently.
In addition, the storage, processing and analysis of the personal and financial information collected or generated by a foreign-invested payment institution must be carried out in China. Where it is necessary to transfer any such data to foreign countries, for example, for handling cross-border business, the transfer must be consented to by the relevant data subjects, and comply with the applicable legal and administrative requirements. The recipients in foreign countries must also act under confidentiality obligations to protect the data received.
A foreign-invested payment institution’s corporate governance, daily operation, risk management, fund processing, reserve fund deposit, and emergency response plan must be carried out in accordance with the regulatory requirements of the People's Bank of China for non-banking payment institutions.
Please click here for the full text (Chinese only) of the Circular.