Seeking to tighten monitoring of online payments and close potential loopholes for fraud or money laundering, People's Bank of China has set a June 2018 date for firms such as Ant Financial, Tencent and others to route transactions through a new central clearinghouse.
China's central bank requested that the China National Clearing Center establish the new operating platform, called Wanglian, for 44 financial firms, Chinese media reported this week.
News of the clearinghouse arrangement comes the same week in which Bank of America Merrill Lynch launched a mobile wallet platform for its business clients in China to better manage and reconcile payments coming from the various wallets in the country.
All of the maneuvers for digital payments also come as China has moved to the forefront of mobile payments, as the central bank has cited nearly $15 million in transactions last year coming from nonbank providers.
Ant Financial's Alipay and Tencent's WeChat Pay have become important drivers in the Chinese economy, putting the central bank in a position to force all third-party payment firms to connect to the new clearinghouse by October 2017 and route transactions by June the following year.
Meanwhile, the central bank says it is also planning to bring nonbanks in areas such as peer-to-peer lending, crowdfunding and private equity, into its risk-assessment system.
Chinese financial institutions have kept close tabs on Alipay's recent Cashless Week, with some publications noting that the bank sent a notice to regional offices asking them to work to prevent the notion of merchants rejecting cash.
China is not the only country in which payments providers are encouraging merchants to initiate an end to cash. It has become increasingly common in India, and even Visa has pushed a "cashless challenge" program to encourage small businesses to decrease acceptance of cash.