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China has the world's largest Internet population and Beijing is
trying to better regulate the country's rapidly-changing
Internet sector, drawing up rules for everything from censorship
to cybersecurity and e-commerce.
Companies which own payment systems can reap huge profits by
charging transaction fees.
"Payment institutions should fully respect customer's right to
choose, and must not force customers to use the internet payment
service they provide, and also must not stop customers using
other Internet payment services provided by other institutions,"
said draft regulations posted on the People's Bank of China's
website.
The move could shift the balance of power for China's online
payment industry, where Alipay, the crown jewel of ecommerce
king Alibaba affiliate Ant Financial Services Group [ANTFIN.UL],
has long held the lion's share of the market.
If payment services from social networking and online
entertainment firm Tencent, which backs ecommerce No. 2 JD.com
Inc, and search firm Baidu are offered on Alibaba's e-commerce
sites, users could opt to use those. Alternatively, Alipay could
cement its dominance if customers opt to use it on rival's
platforms.
The central bank is now seeking external opinions on the draft
proposals.
Alibaba and Tencent declined to provide comment. Baidu was not
available for immediate comment.
Online payment is booming in China, boosted by the proliferation
of hundreds of millions of smartphones. These handsets are now
being used for everything from paying for taxis and meals at
restaurants to buying goods at brick-and-mortar shops.
(Reporting by Paul Carsten; Editing by Elaine Hardcastle)
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