The first half of 2024 will come to an end. On June 30, a reporter from Beijing Business Daily found that according to the information statistics disclosed by various branches of the People's Bank of China, according to the disclosure time, in the first half of 2024, the third-party payment system received a total of 24 fines, including the amount of senior executive penalties, with a total amount of more than 118 million yuan, of which 10 fines were "double fine" fines, and the relevant responsible persons were also fined.
From the perspective of violations, account management, payment and settlement management related to the company's main business are still high-frequency fines. Compared with the first half of 2023, both the number of fines and the amount of forfeitures have increased significantly. In the opinion of analysts, under the normalization of regulatory actions, payment institutions still cannot relax their vigilance, and the generation of fines will further improve the overall compliance of the industry and standardize the business behavior of non-bank payment institutions.
23 institutions were fined 118 million yuan
Fines in the field of payments are also not absent in the first half of 2024. On June 30, according to incomplete statistics from a reporter from Beijing Business Daily, since 2024, the People's Bank of China has issued a total of 24 fines for the third-party payment field, and the total amount of fines and confiscations for 23 institutions has exceeded 118 million yuan, and Yinsheng Payment Services Co., Ltd. (hereinafter referred to as "Yinsheng Payment") has been fined twice.
Compared to the first half of 2023, the number of fines and the amount of forfeitures in the first half of 2024 have increased significantly. According to the statistics of the reporter of Beijing Business Daily, in the field of third-party payment, the People's Bank of China issued a total of 12 fines in the same period last year, and the total amount of fines and confiscations of 12 payment institutions was about 21.52 million yuan. At the same time, in 2023, large fines in the payment field will be concentrated in the second half of the year, and there will be no fines of tens of millions of yuan in the first half of the year.
Image source: Yitu.com
In addition, from the perspective of the amount of fines and confiscations, in the first half of 2024, payment institutions will be fined a minimum of 10,000 yuan, and a maximum of more than 44.6 million yuan. Specifically, among the 24 fines, 3 were issued at the level of 10 million yuan. Among them, Zhejiang Aerospace Electronic Information Industry Co., Ltd. was punished by the head office of the People's Bank of China at the end of May, due to violations of institutional management regulations, violations of business management regulations and other 8 business violations, the company was fined a total of 44.6312 million yuan, accounting for nearly 40% of the total fine amount in the first half of the year.
Among the 5 million-level fines, the most confiscated was Chongqing Qianbao Technology Service Co., Ltd., which violated the rules and regulations involving reserve management, infringement of consumer rights and interests, etc., and even rarely "provided false information during the inspection", with a total fine of 8.371 million yuan.
Yinsheng paid two fines, and the two fines came from the Guizhou branch and the Inner Mongolia branch respectively. In January 2024, the Guizhou Branch of Yinsheng Payment Services was fined 1.166 million yuan by the People's Bank of China for failing to strictly implement the regulations on the management of the settlement accounts of the acquiring banks of special merchants and providing "T+0" fund settlement services to unqualified special merchants. In addition, the Inner Mongolia branch of Yinsheng Pay was fined 137,000 yuan in May for failing to accurately record the special merchants in the special merchant information management system and failing to effectively implement the inspection responsibilities of the special merchants.
Wang Pengbo, chief analyst of Broadcom Consulting, pointed out that under the policy of "long teeth and thorns" in financial supervision, the number and amount of fines in the payment field in the first half of 2024 have increased compared with the same period last year, especially the amount has increased significantly. Since the fine is often a punishment for the violation of the payment institution in a certain period of time in the past, it also shows that the payment institution still cannot relax its vigilance under the normalized regulatory action. The issuance of fines will further enhance the compliance of the industry as a whole and standardize the business behavior of non-bank payment institutions.
The "hardest-hit areas" still need to be strengthened
Overall, among the 24 fines in the first half of 2024, there were 10 "double fine" fines, and many institutions were involved in multiple violations, and anti-money laundering related content such as merchant management and account management are still high-risk areas for fines. From the perspective of the illegal matters of fines, due to the different degrees of violations, even under the same illegal matters, there are differences in the punishment of different payment institutions by the People's Bank of China.
For example, in January 2024, the Beijing branch of the People's Bank of China issued fines to four payment institutions, including Beijing Digital Wangfujing Technology Co., Ltd. and Jianhexin Electronic Payment Co., Ltd., for violating account management regulations, and imposed fines ranging from 10,000 yuan to 100,000 yuan respectively.
Under a single violation, there are also payment institutions that have been heavily fined. In April 2024, Fujian Guotong Xingyi Network Technology Co., Ltd. was fined 1.8 million yuan for violating the regulations on transaction information management, and Shi Mouyang, the general manager of the company at the time, was fined 90,000 yuan; The following month, Guangzhou Helibao Payment Technology Co., Ltd. was warned and fined 2 million yuan for violating the merchant management regulations in the payment and settlement management regulations, and Wang Moushan, the company's executive director, was warned and fined 100,000 yuan.
On the other hand, in recent years, the regulatory penalties for third-party payment violations have become more and more stringent, and fines of millions of yuan and tens of millions of yuan have basically become the norm, and occasionally huge fines of 100 million yuan. Among them, in 2023, the overall amount of fines and confiscations of payment institutions will exceed 6.2 billion yuan.
It is worth mentioning that, compared with previous years, payment institutions will usher in stricter new regulatory regulations in 2024, and there will also be "shuffle" changes in equity structure, license renewal and business qualification division. Judging from the information disclosed by the People's Bank of China, with the successive introduction of the "Provisions on the Supervision and Administration of Non-bank Payment Institutions" and the supporting "Implementation Rules", the name change and license merger of payment institutions are in full swing.
According to the official website of the People's Bank of China, as of now, 92 payment institutions have withdrawn from the market, and the remaining number of licenses is 179. It is foreseeable that after the official implementation of the subsequent "Implementation Rules", the number of payment licenses will still decrease due to requirements such as the reclassification of business qualifications.
"After the release of the new regulatory regulations, the supervision of non-bank payment institutions has actually been benchmarked against banks, and the compliance construction of the industry has become comprehensive and institutional. Combined with the requirements of the new regulations in the performance of duties by senior executives, the 'double penalty system' fines will be more common in the future, which also puts forward mandatory requirements for practitioners, who must standardize the development of business and cannot blindly pursue profits. Violations of the management regulations on merchants, clearing, and payment accounts have always been the hardest hit areas for payment institutions to expand their business, and we must continue to pay more attention to them. Wang Pengbo further said,
Pan Helin, a well-known economist, commented that the number of fines and the amount of fines increased during the year, which means that the regulatory requirements for the payment field have not been relaxed. From the perspective of the type of fines, the penalties focus on payment and settlement management and account management, reflecting that the regulatory focus is on the operation compliance of third-party payment institutions, emphasizing the improvement of payment security, and focusing on strengthening the supervision of capital flow.
Pan and Lin believe that in the first half of 2024, the renaming and license merger of the payment industry will show that payment institutions in the industry are facing higher compliance requirements and raising the entry threshold for the third-party payment industry. Third-party payment institutions will increase their investment in compliance in the future, especially in internal control and risk control.
Beijing Business Daily reporter Liao Meng