Chinese Central Bank Requires All Online Transactions To Clear Via New Central Clearing Platform

In a move to strengthen oversight of online financial activities, the People's Bank of China (PBoC) has required all third-party payment institutions to channel transactions via a newly established central clearing platform.

The new platform, named Nets Union Clearing Corp, started trial operations in April and will be put to use formally on July 1, 2018. By that time, all third-party payment firms, including Alibaba's Alipay and Tencent's TenPay, will no longer conduct transactions, such as bank transfers, outside of regulator's supervision.

Previously, some online transactions could escape regulator oversight. For example, when users transfer money from their Alipay account to a friend's Alipay account, the whole process could be completed on Alipay's own platform. This means the central bank lose insight of an important part of the capit...

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