China‘s central bank said on Wednesday it will tighten regulations on payments via point-of-sale devices (PoS) and the scanning of barcodes to help regulators track fund flows.
The tighter regulations would enhance regulators’ risk management of payment terminals and cut off the illegal flow of funds from cross-border gambling using such devices, the People’s Bank of China (PBOC) said on its website.
“Some market players have altered routing of transactions, merchant codes, merchant names and transaction address … to make it hard for regulators to verify such transactions … and offered chances for criminals to transfer illegal funds,” the People’s Bank of China (PBOC) said in a statement.
China‘s mobile payments have grown quickly over the past decade with most executed by scanning Quick Response (QR) codes. Some scans use a specialised PoS device, others occur mainly via mobile phones.
Under the new rules, institutions processing transactions conducted through PoS devices must report some key information such as the merchant’s code and the geographic location of the device, and make sure the information is consistent during the transaction processes, the central bank said.
The rule will be take effect on March 1, the PBOC said.