Wechat and Alipay: measures to ban the use of personal codes should be taken from March 1, 2022

    Previously, we first reported a few months ago in Russian and English in our WeChat information program about the ban on the use of WeChat and Alipay personal codes to collect money in business activities from March 1, 2022, recently the Central Bank of China gave some clarifications on this issue.

   As we reported, on October 13, 2021, the "Notice of the People's Bank of China on Strengthening the Management of Payment Terminals and Related Enterprises (Yin Fa [2021] No. 259)" (hereinafter referred to as the Notice) was published on the official website of the People's Bank of China, in According to which, from March 1, 2022, the use of WeChat and Alipay personal codes to collect money will be supervised and the use of personal codes to collect money in business activities will be prohibited.

   The tightening of supervision was explained by the head of the relevant department of the Central Bank. In recent years, personal collection codes have been widely used in China, which has improved the efficiency of fundraising and payment, he said, but there are also some hidden risks. For example, some criminals use personal static codes to raise funds and to remotely transfer game funds online. Many foreigners in China use personal codes to receive illegal payments without completing the necessary documents and business registration.

   "Notice" explains the management of receipt codes. Receipt codes created by payees, such as individuals or specialty merchants, and used by the payer to read and initiate payment instructions should effectively differentiate between individuals and specialty merchants, the location and purpose of the payment  code, to prevent delivery in rent, sell or use the code for illegal activities.

   For individuals with obvious characteristics of a business, code collection agencies should not provide them with business-related collection services using personal collection codes.

   Code collection agencies (WeChat and Alipay) should take effective measures to prohibit the use of personal static codes for non-personal payment collection. For personal dynamic collection codes saved through screenshots, downloads, etc., reference should be made to the relevant implementation provisions for personal static collection codes. “The inclusion of code payment in oversight has closed loopholes in code payment channels that could previously be used more for money laundering.”

   The "Notice" requires individuals with obvious business characteristics, code payment and collection agencies to provide them with special sellers collection codes and refer to compliance with the relevant rules.

   Operating activities refer to all transactions and events other than corporate investment and fundraising activities. Commercial activities mainly include the sale of goods, the provision of labor services, operating leases, the purchase of goods, the acceptance of labor services, advertising, promotion of products and the payment of taxes.

   The relevant person in charge of the central bank said that the "Notice" as a whole will help to better protect the legitimate rights and interests of consumers, and help prevent criminals from stealing consumers' personal information and even misappropriating account funds by modifying payment terminals.

   This contributes to the improvement of the quality of services such as bank statements and requests for information about transactions of banks and payment institutions, fully protecting the consumer's right to information and reducing related disputes and complaints; in the long term, the relevant requirements of the "Notification" on the regulation of personal collection codes will be finalized.

   It is not yet clear how WeChat and Alipay will put into practice the requirements of the Central Bank - whether they will simply block the accounts of violators or limit their functionality, but they will definitely not neglect this requirement of the Central Bank, therefore, from March 1, 2022, foreigners in China should refuse to accepting and transferring money through WeChat and Alipay personal codes, unless they can document the non-commercial nature of these transactions