China drafting further regulation for mobile payments

The new rules will follow the principles of encouraging innovation, a unified market, inclusion of all market players, and while not restricting market forces.

China's central bank is drafting more rules to regulate payments made over mobile phones, according to Xinhua news.

The proposed regulations will be based on the principles of encouraging innovation, a unified market, inclusion of all market players, and allowing the market to play the leading role, said Fan Shuangwen, deputy head of Department of Payment and Settlement at People's Bank of China (PBOC).

Fan pointed out government policies should encourage business innovations and guide cooperation among different sectors involved in mobile payment , given the diversity of the value chain and the complexity of players' interests.

Currently, mobile payment busineses of non-financial institutions are required to obtain a license, with 37 having been awarded so far, according to Fan.

The booming mobile commerce market in China has seen a range of operators seeking for a slice of the pie, such as financial institutions, telcos , Internet companies, and third party payment providers. Dominant players currently include Alipay from e-commerce giant Alibaba and Tenpay by Internet giant Tencent.

The Chinese market for third party payments was worth US$54.7 billion in the third quarter this year, 173 percent more than the previous quarter, according to research firm Analysys International.

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