The People's Bank of China (PBOC) Wednesday released new rules on the use of QR codes for payments to reduce transaction risks, reports the Beijing News.
According to the new rules, which will take effect in April 2018, institutions providing barcode-based payment services are required to apply for a license. Specific transaction limits will also be applied to barcode-based payments.
Online payment modes are classified into four types, based on the different levels of risk-prevention capability. Class-A payments are the safest mode with no transaction size limits, while the other three-level payments have transaction limits of 5,000 yuan, 1,000 yuan and 500 yuan, respectively.
Class-D payments or static barcode payments, which are the most widely used QR-code transactions in China, are considered to be high-risk transactions. Valid QR codes on display in stores can be tampered with and payments diverted to a fraudulent account. The new regulations recommend that barcodes are securely generated and that businesses regularly check the barcodes they have on display to ensure that they have not been altered.
"Setting a daily limit of 500 yuan for static barcode payments makes the loss controllable once a payment fraud case happens," said Tang Ling, the compliance director with a payment company.
"Market statistics show 95 percent of barcode payments are small transactions bellow 500 yuan," noted Zhao Yao, a researcher at the Finance Research Institute with the Chinese Academy of Social Sciences. Zhao believes that the new transaction limits would not cause inconvenience to most QR-code payment users.
Paying through QR codes is increasingly popular in recent years. The number of mobile payment users in China has exceeded 520 million, according to Ant Financial, the financial affiliate of Chinese Internet services company Alibaba.