BEIJING — A decision by China’s central bank to rein in reserve funds held by payment firms could cost the industry upwards of $689 million a year, spur consolidation and alter the way Asia’s biggest tech firms move money.
Mobile payments using in-app QR or bar codes have become ubiquitous for everything from taxis to grocery shopping and bike rental in China in recent years, with customers making 19 trillion yuan ($2.9 trillion) in transactions in 2016, according to iResearch.
The rapid uptake has spurred fears that mobile payment firms, without oversight, could misuse funds held while transactions between users and merchants clear.
Regulations unveiled by the People’s Bank of China (PBOC) on Saturday require firms to allocate 42 to 50 percent of their total client funds in regulated interest-free reserve accounts by April, up from a current rate of 12 to 20 percent.
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