The People’s Bank of China (PBoC) has suspended the use of virtual credit cards and quick response (QR) code payment provided by China CITIC Bank Corporation Ltd. (00998.HK), Alibaba Group’s Alipay and Tencent Holdings (00700.HK)’s Tenpay, 21st Century Business Herald reported on March 14.
The virtual credit cards were suspended as the central bank needs some more time to check them and ensure that the customers’ information is well protected, the report said, citing a PBoC document. At the same time, QR code payment, which enables the online-to-offline (O2O) transactions, may create inter-provincial deals that are difficult for regulators to monitor, it said.
PBoC’s curb came just three days after the CITIC Bank announced its plans to launch virtual credit cards with Alipay and Tencent. The Bank said on March 11 that one of its two new credit cards will use the database of Taobao.com, an e-commerce platform of Alibaba, to identify and grant credits to individuals while another one will allow users of Tencent’s Weixin, an instant messenger, to do e-commerce and buy investment and insurance products.
Zhong An Online Property Insurance Co. Ltd., in which Ablibaba owns a 19.9 percent stake and Ping An Insurance (Group) Company of China (02318.HK) and Tencent own 5 percent each, will provide credit insurance services for the virtual credit cards.
Due to the suspension of the service, trading of CITIC Bank’s shares in Hong Kong was suspended at 1 p.m. on Friday after they fell 6.9 percent in the morning session.
CITIC Bank said it will not stop developing its internet finance businesses. Meanwhile, the bank signed a cooperation framework agreement with Baidu.com, China’s largest online search engine, to jointly develop internet finance businesses.
Some Chinese media said virtual credit cards and QR code payment are suspended as they hurt the interests of China Unipay, the nation’s largest credit and debit card service provider.
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