QR codes are everywhere in China. From buying groceries to hailing taxies to hiring a bike — there’s a QR code for everything. Even beggars have reportedly started accepting payments via QR codes, shedding light on its popularity in the country. In fact, around one-third of the mobile payments in China are via QR codes and this figure is expected to rise in the coming future. With millions of people living in China relying on QR codes for making payments on a day to day basis, it has become necessary for China’s financial institutions to start to regulate this modern mode of payment. In this regard, Chia’s central bank has announced plans to start regulating payments made by QR codes, barcodes, and other modes of payment via scanning, by keeping an initial payment limit of 500 Yuan ($76.5) per person, per day. Additional daily limits of 1000 Yuan ($153) and 5000 Yuan ($765) apply to payers who haven’t completed certain authentication procedures.
The need for regulations in this sector is important to ensure a solid check on fraudulent transactions. Things like money laundering or making payments in exchange for cash are different tactics used by sellers using QR codes and the Chinese government wants to stop such kind of activity by introducing proper regulations. Another reason is to foster fair competition between the two mobile payment giants in China, Alibaba’s Alipay and Tencent’s WeChat. QR code payments are very common among their services, so it becomes necessary to ensure there are enough regulations to keep things in check.
Apart from payment caps, the central bank wants better policies with regards to QR code payments, like expiration dates, encryption, regular updates etc to ensure that QR codes are not being used by sellers for fraudulent transactions. The payment limits are set to come into effect from April 1, 2018.