PBOC highlights virtual payment risks

BEIJING - Security concerns forced China's central bank to suspend payments via code scanning and virtual credit cards, a People's Bank of China (PBOC) senior official told Xinhua on Monday.

The PBOC would allow such online payments to be reintroduced on a trial basis once related security and technical standards were in place, said the anonymous central bank official.

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The online shopping boom has led to e-commerce leaders like Alibaba and Tencent scrambling to give customers a quick and convenient way to pay, such as payments by scanning a bar or QR code.

Alibaba and Tencent said earlier this month that they had joined China CITIC Bank to each issue one million online credit cards, only to be called off by the central bank two days later.

The central bank official attributed the suspension to concerns about multiple risks.

Technological and business models concerning payments via code scanning are only in the experiment stage, and there is no uniform technological and certification standards, the official said.

The official said substantial risks were in the "formation mechanism and transmission process" of the codes, lack of security guarantee for the payment terminals, and a shortage of protective tools for code verification.

In most countries, central banks, bank card associations and financial institutions are relatively cautious with payments via code scanning and there has been no widespread use of the payment model, he said.

The official also referred to a number of cases in China resulting from virtual payments where consumers, after code scanning, found their personal information had been leaked or money stolen from their account.