All of China’s bank-led payment platforms and third-party payment providers would have to ensure their customers use their real names when paying online under regulations the People’s Bank of China proposed Jan. 5.
Use of nicknames or false names poses a security and money-laundering risk, and requiring the use of actual and verified names could put an end to such problems, the central bank said in the draft proposal.
With its rapid growth, the electronic-payments market also is increasingly vulnerable to financial misdoings, Weidong Wang, an analyst from the China-based iResearch Consulting Group, tells PaymentsSource, noting most consumers use their actual names when paying online.
“The main difficulty in implementing a real-name system would be the increase in business costs for payment providers, which would include overhauling the complete back-office systems,” he says.
Convincing hesitant consumers to agree to use their real names also might be difficult, especially if their account is dormant, Wang says. Online-shopping activity also could drop if many consumers decline to provide their real names, he adds.
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