China’s central bank ramps up digital payment security

0
17

A mobile payment being made using the QR barcode system. Photo: Wikimedia Commons

Security will be beefed up to combat private data leaks and attacks from hackers on China’s booming barcode payment system. Known as quick response or QR coding, this allows consumers to make an instant payment from their bank accounts by using their smartphones.

To make a transaction, they simply scan a black-and-white barcode provided by retailers and generated through mobile apps, such as Tencent’s WeChat Pay and Alipay, part of the Alibaba-affiliated Ant Financial Service Group.

The system is at the very heart of the digital economy in China with the number of  mobile payment users exceeding 520 million, Ant Financial has reported.

But as security risks increase, the country’s central bank plans to roll out new regulations to combat cyber attacks.

“Due to the lack of uniform business and technical standards, there are still potential risks in the barcode generation mechanism, and transmission process, as well as risks in payment security,” the People’s Bank of China (PBOC) said in a statement.

The guidelines will include technical requirements on QR encryption, transaction verification and information protection to plug privacy leaks.

All online payment service providers will also need a permit to operate issued by the central bank. Finally, transactions made through QR coding will have to go through a qualified clearing system under the oversight of the PBOC.

“The central bank has also set three levels of daily transaction limits on QR code payments based on the security level of the transaction verification method, starting from 500 yuan (US$77),” Caixin, a Beijing-based media website specializing in financial and business news, reported.

The growing popularity of the QR payment method has triggered concerns such as security issues and unfair market competition, according to a PBOC policy document released by the government-owned news service Xinhua.

“The central bank has always been seeking a delicate balance between encouraging innovation and controlling risks, and the new standards on barcode payment have reflected that principle,” it said, adding that the new regulations would come into force early next year.

Source

LEAVE A REPLY

Please enter your comment!
Please enter your name here