People's Bank of China's new regulations on QR code payments for mobile payment providers like WeChat and Alipay that would go into effect from April 1, 2018.

Image source: Google

Here are a few more things you should know about the new rules, and to see how will it affect you?

1. The daily QR code payment limit of RMB500 aimed at vendors, new rules have minimal impact on consumers.

A single person paying via the static QR codes to have a limit of RMB500 each day. The static QR codes, for example, shops or restaurants display a printed out QR codes that customers scan to pay.

According to Globaltimes, this will have little impact on consumers, the threshold is specifically for the QR codes of vendors, not for consumers. If you spend more than RMB500 on dinner, just ask cashier to scan the dynamic QR codes on your phone, which is much safer.

2. Paying via dynamic codes will have higher limits.

Based on the security level of the transaction verification method, the central bank has also set three daily transaction caps, RMB1,000, RMB5,000 or they can set new caps with both sides' independent agreement. QR codes payers are required to complete different authentication procedures.

Generally speaking, four different payment limits will be set (Grades A, B, C and D). Here are requirements for the first three (all for dynamic codes):

Grade D applies to static QR codes only and will be capped at RMB500, no matter what payment method you use. 

3. Payment providers and merchants accepting QR code payments will be required to obtain approval under the new rules.

The central bank will require all QR code payments, no matter happens in domestic or overseas, must obtain permits from either the People's Bank of China (PBC) or other legally-allowed clearinghouses. 

It makes transactions via payment providers to obey the same rule as that via banks, all transactions made via code scanning by banks and non-bank institutions will have to be settled through a qualified clearing system under the oversight of the central bank. Below is the graphic how the Chinese clearinghouses work.

4. The regulation aims to improve mobile payment security.

By establishing various technical guidelines for transactional QR codes, including encryption, payment verification, information protection, tokenization, expiry dates, the new regulations aims at preventing private data leaks, hacks, malicious viruses, theft/fraudulent transactions and other fake QR code scams, which have recently been on the rise as China rapidly moves towards becoming a cashless society. 

Alipay and WeChat, China's two largest mobile payment platforms, have openly supported the new regulations, if you use a static code to receive payment, the new regulation may affect you a lot, otherwise, there is minimal impact on you.

Source: HiTouch

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