A decision by the Chinese government requiring mobile payment providers to deposit all prepaid funds from customers with the central bank means the companies will no longer be able to earn interest on the funds, Nikkei Asian Review reported.
By the start of 2019, all customer funds must be put in accounts at the People’s Bank of China. Currently only about half of the funds are deposited with the bank, the newspaper said.
The country’s two major mobile payment platforms – Alibaba’s Alipay and Tencent’s WeChat Pay – are not required to pay interest on the funds to customers.
With mobile payment companies holding an estimated CNY500 billion ($75.4 billion) in customer funds and assuming an interest rate of about 1.5 per cent annually, the companies collectively earn about CNY7.5 billion in annual interest revenue, Nikkei Asian Review said.
The central bank this year introduced a number of measures aimed at reducing risks for consumers and fighting fraud. In April it set a CNY500 ($75) daily limit on mobile payments.
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