Use a licensed payment provider to settle directly with sellers instead of collecting their money in your platform's account
Receiving buyers' money in your own account and forwarding it to sellers can put you in regulated payment territory. A Chinese non-bank payment business requires central-bank approval and at least RMB 100 million in actual paid-in capital. Unauthorized activity can result in closure, confiscation, fines for the business and responsible people, and criminal liability in serious cases. Design settlement through a properly licensed provider.
What it takes
No cost to understand the requirement. Integrating a licensed payment product takes time; actual provider fees depend on the product. A licensed provider holds authorization from the People's Bank of China. Use its split-settlement or safeguarded-transaction functions so buyers' money settles to sellers without entering the platform's own account.
What you may gain
The regulations define payment services as transferring money according to electronic payment instructions submitted by payers or payees. Operating such a business requires approval by the People's Bank of China and a payment business license. Minimum registered capital is RMB 100 million in paid-in monetary capital. Unauthorized establishment of a non-bank payment institution or direct or disguised provision of payment services can lead to suppression of the operation and confiscation of unlawful proceeds. Where unlawful proceeds are at least RMB 500,000, the additional fine is one to five times those proceeds. With no proceeds or less than RMB 500,000, the fine is RMB 500,000–2 million. The legal representative and directly responsible people face separate fines of RMB 100,000–500,000. China's Criminal Law also includes unlawful payment and settlement services within illegal business operations: serious cases can bring up to five years' imprisonment, and especially serious cases more than five years. A Supreme People's Court and Supreme People's Procuratorate interpretation sets serious-case thresholds at RMB 5 million in unlawful business volume or RMB 100,000 in unlawful proceeds for the conduct it covers. The payment regulation took effect nationally in May 2024.
Context & considerations
The source recommends keeping settlement money out of the platform's own account. The industry term for certain unauthorized collection-and-payment arrangements is “secondary clearing,” or erqing, but that term does not appear in the cited official texts. The implementing rules refer to disguised provision of payment services. The cited judicial interpretation specifically describes three forms of cash-out activity: fictitious transactions, use of organizational accounts, and checks. It does not expressly name ordinary platform collection and forwarding, so these citations do not establish that every such arrangement necessarily constitutes a crime.
Research & references
State Council (2023). Regulations on Supervision and Administration of Non-bank Payment Institutions, Order No. 768, Articles 2, 6, 8, 27, and 47. https://www.gov.cn/gongbao/2024/issue_11086/202401/content_6924970.html; People's Bank of China (2024). Implementing rules for those regulations, PBOC Order [2024] No. 4, Article 68. https://www.gov.cn/gongbao/2024/issue_11546/202408/content_6970979.html; National People's Congress (1997). Criminal Law, Article 225(3). https://www.spp.gov.cn/spp/fl/201802/t20180206_364975.shtml; Supreme People's Court and Supreme People's Procuratorate (2019). Interpretation on applying the law in criminal cases involving unlawful payment and settlement services and unlawful foreign-exchange trading, Articles 1, 3, and 4. https://www.spp.gov.cn/xwfbh/wsfbt/201901/t20190131_407161.shtml