Prominent players in the payment industry have voiced their support and commitment in response to China's recently introduced supervision and administration of non-bank payment institutions, underscoring the pivotal role these rules are expected to play in shaping the industry's future.

Alipay, WeChat Pay, and the NetsUnion Clearing Corporation (NUCC), have hailed these regulations as crucial steps towards fostering healthy competition, effective regulation, and standardized development within the payment sector, according to official announcements.

China's non-bank payment industry, vital for small-scale, convenient payments and financial inclusion, will face new rules effective May 1, 2024. These rules clarify the definition of non-bank payment institutions, their establishment requirements, and introduce improved payment-related regulations.

WeChat Pay and UnionPay underlined the potential of these rules to enhance regulatory oversight. WeChat Pay highlighted that by granting administrative status to payment institution rules, the company anticipated reinforced supervision, enhanced regulatory efficiency, and a more compliant industry landscape. 

UnionPay emphasized the clarity of these regulations in defining the boundaries of non-bank payment institutions, with a strong focus on security and transparency. It pledged to collaborate with industry stakeholders, including non-bank payment institutions, in compliance with regulations.

Leading payment institutions such as Meituan's Qiandaibao and ByteDance-owned UIPay's operator, Wuhan Hezhong Yibao Technology, expressed their commitment to implementing these regulations. The companies said they consider these rules as essential guides for their business development and pledge to prioritize compliance, innovation, and service quality while ensuring equitable competition within the payments market.

PayPal China, a subsidiary of the American multinational financial technology company, said the new rules boosted its confidence in the future of the Chinese market, Xinhua reported. The company is committed to collaborating with industry stakeholders to facilitate high-quality development while meeting the diverse payment needs of the real economy.

As non-bank payment services have seen a swift expansion in China, Chang Cheng, a financial banking partner at Hai Run Law firm, told CGTN that, along with this growth, there has been a rise in criminal activities, including illegal fundraising, telecom fraud, money laundering, gambling, and various other illicit activities.

As of September this year, the non-bank payment sector comprised of 185 institutions. The institutions processed over 1 trillion transactions and handled nearly 400 trillion yuan ($56.49 trillion) annually. This constitutes roughly 80 percent and 10 percent of the total national electronic payment sector respectively, data from China's central bank showed.

The new regulations further provide clear guidance and a legal basis for comprehensive supervision, contributing to the prevention of risks of the industry. Meanwhile, these rules promote fair competition, which, in turn, will support the long-term growth of real economies, Cheng said. 

China's mobile payment sector has unequivocally established itself as a global frontrunner, playing a pivotal role in propelling economic growth and elevating the quality of life for its populace, he added.