BEIJING, China—Online lending in China is being dealt a serious blow as the country plans to tighten regulations governing the nation’s 270 online-payment firms, including Alibaba Group Holding Ltd.’s finance arm.
According to Bloomberg Business, under draft rules published on July 31, China’s central bank will limit the amount an individual can pay online to 5,000 yuan ($805) per day through third-party payment accounts, unless the customer’s identity can be verified by a security token and electronic signature. The People’s Bank of China is seeking public feedback by Aug. 28.
Following pressure from China’s traditional banks, the central bank last month imposed stricter rules on the online finance industry, which analysts expected to lead to sweeping changes and failures among online lenders.
According to Friday’s draft rules, customers with at least five methods of verifications can open a so-called “comprehensive account,” which limits annual online or mobile payments to 200,000 yuan ($32,188.50) per person, Bloomberg reported. With three to five verification methods, customers can only open a “consumption account,” with an annual transaction limit of 100,000 yuan.