PBOC highlights virtual payment risks

"With so many problems unanswered, the security risks would be unimaginable if code-scanning payments were adopted by hundreds of millions of users of payment companies," he warned.

PBOC suspends use of virtual credit cards

Alipay to issue online credit cards

Concerning virtual credit cards, the official pointed to the application process which has no strict risk control procedures or face-to-face qualification checking required by traditional banks.

"So, the anti-money laundering system and the real-name system for bank accounts are at risk of being damaged," he said.

Virtual credit cards are not allowed for now, also because of the lack of a uniform regulation governing the issuance of virtual and real credit cards, which might lead to unfair competition, the official said.

However, both virtual credit cards and code-scanning payments still have a future in China, but only after security concerns are addressed.

"It is suspension, not termination," the official stressed.

The PBOC would work with all relevant sides including the payment firms to evaluate the two business models in terms of technological security, consumer protection, fighting money laundering and real-name system, he said.

"We would take security as our bottom line and support the payment companies in improving business procedures and regulations. After the security concerns get addressed, they can conduct the business on a trial basis," he added.

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