The financial institution has ordered the cessation of all mobile payments that use quick response codes.
China’s central bank has recently released an order that will put a stop to all online mobile payments units of companies that are using QR codes to send and receive funds.
This news has been confirmed by both Tencent and Alibaba, which had been using the barcodes.
Both Alibaba and Tencent have been commanded to stop the use of QR codes in order to process the payments of its online sales, according to a recent report from those two companies. The online and mobile payments unit of Alibaba Small and Micro Financial Services Group, Alipay, is an affiliate of the online giant, Alibaba Group Ltd. and will be hit hard by this decision as it had been using the quick response codes as one of its primary methods of allowing shoppers to be able to send and receive funds.
To many, this abolishing of payments though QR codes has come out of nowhere.
This will also be affecting the Tencent Holdings Ltd. online payment unit, Caifutong. Both Caifutong and Alipay have revealed that they have received direct notifications from the Chinese central bank that indicated that they will need to stop accepting QRcode transactions. The bank, on the other hand, was not immediately responding to comment requests on the topic.
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CITIC Bank has also not immediately responded to requests for comment. That organization will be highly affected by this decision as last week it had only just announced a decision to partner with both Tencent and Alibaba for issuing virtual credit cards that would use the barcodes for making payments.
This decision by the central bank in China comes at a time in which many other financial institutions and private companies have been increasing their use of QR codes in order to process mobile payments. This technology has even been used by the biggest success story in smartphone based transactions, Starbucks. It will be interesting to discover what motivated the decision to ban the barcodes within the country, particularly when it looked as though they were going to take off at quite an explosive rate.