The E-commerce market is something that has grown exponentially in China, and has grown faster than what most people have theorized. However, after all this growth, it seems that China is now just catching up on regulations that need to be in place for online shopping platforms. One of the biggest regulations that are going to be seen with these online shopping platforms is the new law called “Method of network Payment Service Management for Third Party Payment Agents”.
What is the Law?
The law is looking to protect consumers so that their information and privacy are always respected in the online shopping world. Though the law is not the law yet, as it is in its draft stage, it is pretty clear that this law is meant to be for the protection of the consumer only. However, keep in mind that this new law is going to only apply to third party payment agents, not to those that are state owned.
Learn more about online payments, here.
The drafted law is imposing limits on how much consumers can spend daily on these shopping platforms, as well as what they can annually spend online via third party payment agents. The amount of which the person can purchase is going to be determined by the security checks that are performed with the online shopping platform. This is an attempt at ensuring there is not as much fraud taking place on the market.
According to the new law, if the payment agent has not type of security in ensuring payments are made by the cardholder or the account holder, then the person is limited to RMB 5000 per day. For those agents who do put in those extra security measures, then there is no limit that a person can spend per day. For those payment agents who only use one element to secure transactions for customers, they will be limited to each customer spending RMB 1000.
In addition, these third party payment agents are not going to be allowed to lend money to anyone, as China feels this would be a conflict of interest for both parties involved.
Learn more about online lending, here.
Thoughts on the New Law
Though these restrictions are going in to place as a way to battle the online shopping platforms and the amount of fraud that takes place yearly, there are several people who are greatly upset with this, including customers and these third party payment agents. The fear is that with this new law in place, the online shopping platform is not going to thrive as it has been. For customers, this may mean not having as great of a selection for goods, and for the online shopping platform it could mean losing out lots of business.
China has the draft law open to public opinion until August 28, 2015, so those who want to speak out will want to do this soon enough. Those who fear this law would impact their online shopping actions will want to let it be known why and what other regulations should be considered.