As popular as the mobile transactions may be, the country’s central bank is issuing new security regulations.
China’s central bank is rolling out new regulations to help prevent QR code payment fraud. Quick response codes have become exceptionally popular in the country but have exposed consumers to fraudulent activities from criminals.
Some of the most popular mobile payments apps in China currently use the barcodes to complete transactions.
Both WeChat and Alibaba’s AliPay – two of the largest mobile payments apps in the country – use QR code payment technology to complete purchase transactions. In fact, using those applications has become more commonplace in certain parts of China than using cash. Now, as much as the government is pleased with the success of the mobile payments adoption rate, it is hoping to add regulations to protect consumers against QR code payment fraud.
Cashless transactions are considerably less expensive for the government, but at the moment there remains a cost associated with those purchases. Many merchants are also seeing considerable advantages to the use of the tech. For instance, taxi drivers can receive payments without having to continually try to come up with small change.
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However, criminals are also using the opportunity for QR code payment fraud, holding the tech back.
Criminals have been placing their own QR codes over top of legitimate ones in services such as bike rentals, ensuring that they payments are sent to their own accounts and not the bicycle rental company. Moreover, questionable online retailers have been using the quick response codes to send themselves money in order to alter their books.
China’s new regulations through the central bank have been created in the hopes of minimizing those practices. They will roll out in April 2018 and will limit static QR code transactions to Rmb500 (about $76) per person, per day. Moreover, for individuals who haven’t completed certain authentication steps, there will be additional Rmb1,000 (about $153) limitations.
The People’s Bank of China feels that these caps, among others, will reduce the opportunity for QR code payment fraud. Moreover, if the fraudulent activity should occur, it will cut down on the size of the scam.