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China plans central custody accounts for payment platforms to trim risks: state media
[SHANGHAI] China is considering implementing centralised custody accounts for funds from the country's payment platforms, the state-run Securities Times reported late on Thursday, in part of a drive to reduce financial risks in the fast-growing sector.
The People's Bank of China has been raising the reserve funds ratio that third-party payment firms are required to deposit with a central bank controlled account. Earlier this year, it increased the ratio to 50 per cent from 20 per cent previously.
It has also pledged to eventually ban non-bank payment firms from making any private investments with money deposited by users, which would see the reserve rate eventually increased to 100 per cent.
China's third-party payment platforms have grown rapidly in recent years, including those backed by tech giants Alibaba Group Holding Ltd payment affiliate Ant Financial and Tencent Holdings Ltd.
The official Securities Times, citing anonymous sources, said China's central bank was planning a trial with 26 payment platforms. As part of the trial, these platforms would deposit all user funds in a centralised account.
The newspaper said the plans were still in the discussion stage and there was not yet an official document on the matter.