The central bank in the country is working on creating standards for the use of quick response codes.
QR code payments have spent years in a state of limbo. There has been a ban on using quick response codes for mobile payments due to a lack of regulations. That said, the central bank is getting ever closer to drafting security and tech standards for QR codes in combination with mobile transactions.
Once the regulations have been passed, it will allow third party payment providers to offer rapid verification processes.
This form of transaction has already been in use in other countries for several years. However, for the last two years, QR code payments have been stuck in a regulatory midpoint without any real progress. This occurred when the central bank suspended this type of mobile wallet service, generating considerable controversy.
Now, reports reveal that the People’s Bank of China (PBOC) has placed a new focus on the development of a standard for the technology and security requirements for mobile payments using QR codes. That would pave a path for the use of this type of system within the Chinese marketplace and could lift the current ban.
Many mobile wallets use QR code payments verifications in order to make the process rapid and convenient.
The PBOC has now given authorization to the China Payment & Clearing Association (CPCA) to develop a standard for purchases made over smartphones and other mobile devices. This nonprofit industry organization will focus on standards for QR code scans that will verify and authenticate transactions.
The bank has already laid out a list of requirements on a number of factors, such as the data encryption and protection of personal information, accounts and money, say the reports. The use of QR codes for completing mobile payments has been banned by the PBOC since March 2014.
At that time, the central bank justified the move by saying there were concerns regarding the potential theft of information and personal identity. Critics say the banning of QR code payments was a direct effort to try to protect China UnionPay. UnionPay is a bankcard association controlled by the state and which operates the interbank network in China. It also happens to hold a monopoly on bankcard payments in the country.
