The Chinese Ministry of Commerce on April 12 published guidelines for online third-party payment providers in an attempt to regulate the fast-developing business-to-consumer e-commerce market.
The ministry says it produced the guidelines to create a safe and secure transaction platform for the country’s online retailers and shoppers. Specifically, the new guidelines specify the roles and principles of online retailers, consumers and third-party payment providers.
China has a variety of third-party payment providers, biggest of which is Alipay, an online-payment subsidiary of Hangzhou-based Alibaba Group. Alipay became one of the world’s largest online payment providers in November, with a daily transaction volume of 2 billion yuan (US$302 million or 210 million yuan).
Under the ministry’s guidelines, providers whose daily transactions exceed 100 million yuan must set up a multilocation backup system in case of a disaster.
Moreover, they will have to process transactions separately, so Alipay, for example, will have to process transactions on its business-to-business e-commerce site Alibaba.com, also a part of the Alibaba Group, separately from the transactions it processes for other e-commerce sites.
Providers also must store their online transaction data for at least two years, and they cannot disclose the information to a third party unless stipulated to do so by law, according to the guidelines.
China had the world’s highest number of Internet users at 457 million as of the end of 2010, among whom 148 million were active online shoppers, according to the ministry.
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