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Category Archives: Global Insights

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Draft New Law Will Change the Regulatory Landscape for E-Commerce in China

Posted in Global Insights
China’s e-commerce market, with an annual turnover of more than 3.8 trillion yuan last year, has become the largest in the world. The various laws and regulations that were enacted by different authorities at different times can no longer keep up with the new issues and new challenges. With the foregoing background, Chinese lawmakers recently post… Read the rest

China Report: Uniform Interchange Rates Now Apply; Differentiated Interchange Fees Based On Different Types of Merchants No Longer Exist

Posted in Global Insights
I. Highlights of the New Regulation On September 6, 2016, a new Chinese regulation regarding fees for the use of bankcards (“Interchange”) in the PRC became effective. For these purposes, Interchange is comprised of fees charged by the card issuer, fees charged by the payment network and fees charged by the acquirer. The new regulation is called the… Read the rest

Foreign Vendor Due Diligence

Posted in Global Insights
Innovation outside of banks is driving sharp increases in outsourcing and partnerships, making foreign vendor due diligence an even more essential component of operating in the FinTech space. At ACI’s recent Advanced Legal, Regulatory and Compliance Forum on Cross-Border & Global Payments and Technologies in New York, DWT Payment team member ARead the rest

The Fourth European Union Anti-Money Laundering Directive and Its Effects on Financial Institutions Operating in the EU

Posted in Global Insights
The Fourth European Union Anti-Money Laundering Directive (Fourth AML Directive), approved by the European Parliament on May 20, 2015, went into effect on June 25, 2015, repealing the 2005 Third AML Directive. Given the evolving nature of the money laundering and terrorist financing typologies, as well as the decade-old Third AML Directive in place, th… Read the rest

OFAC Warns Financial and International Trade Sectors on Evasion of Crimean Sanctions

Posted in Global Insights
On Dec. 19, 2014, President Obama issued Executive Order 13685, “Blocking Property of Certain Persons and Prohibiting Certain Transactions With Respect to the Crimea Region of Ukraine,” to impose sanctions relating to the Russian occupation of the Crimean region of Ukraine (“Crimea”). E.O. 13685 prohibits most direct and indirect t… Read the rest

Chinese Government’s Announcement to Open Bank Cards Network Market

Posted in Global Insights
On Oct. 29, 2014, in a routine working session, the China State Council determined that the Chinese government would “open” bank card acquisition and settlement businesses in China. Qualified Chinese domestic and foreign investors may apply to establish bank card acquisition and settlement businesses in China and to process Chinese domestic bank… Read the rest

CFPB Subjects Large International Money Transmitters to Supervision

Posted in Global Insights, Regulatory and Compliance
The Consumer Financial Protection Bureau (CFPB) finalized its rulemaking defining larger participants in the international money transfer market. Companies that engage in at least one million international money transfers each year are now considered larger participants and will be subject to the CFPB’s supervisory authority effective Decembe… Read the rest

Online Payments in China: Recent Regulatory Actions

Posted in Deals and Technology, Global Insights
On March 13, 2014, People’s Bank of China (“PBC”) issued an opinion letter halting immediately the use of QR codes for payments using mobile phones (as distinguished from using QR codes at POS terminals) well as the use of virtual credit cards (“Opinion Letter”). The Opinion Letter expressed concern that QR-based payments over mobile phones … Read the rest

A Q&A on Recent Developments Involving China Union Pay

Posted in Global Insights
Recently, DWT payments team members Vincent Wang and Norm Page sat down in our Shanghai office to discuss recent developments involving China Union Pay (CUP). Vincent Wang has extensive experience helping U.S. companies and other clients pursue, develop and maintain operations in China, and he advises clients in a wide range of areas, including payment… Read the rest

Legal Overview of China’s Regulation on Payment Service by Non-Financial Institutions

Posted in Global Insights, Regulatory and Compliance
At ACI’s 2nd Advanced Forum on International & Cross-Border Payments in San Francisco, DWT partner Vincent Wang gave a presentation entitled “Legal Overview of China’s Regulation on Payment Service by Non-Financial Institutions.” The presentation focused on the following topics: Regulation of Payment Service: In Genera… Read the rest

Single Purpose Commercial Prepaid Cards and Their Implementing Practices in Shanghai

Posted in Global Insights
In September 2012, the Ministry of Commerce (“MOFCOM”) issued the Administrative Measures on Single Purpose Commercial Prepaid Cards (Tentative) (“Single Purpose Cards Measures” — click here for the measures in Chinese and click here for an English translation), which took effect on Nov. 1, 2012, and provide the basic principles on the… Read the rest

Developments in Chinese Mobile and E-Payments

Posted in Global Insights
The year end is seeing many potentially significant developments in mobile and electronic payments in China. Several of these developments are noted below. Forthcoming Standards: Lu Shuchun, deputy chief of Science and Technology Division of the People’s Bank of China (PBOC), has announced that mobile payment standards would be announced soon. PBO… Read the rest

Reduced Interchange Fees in China Effective February 25, 2013

Posted in Global Insights
The ten year-old regime governing merchant fees in China is about to change – and the fees are, in general, about to be reduced by one-fourth or more. This change will take effect February 25, 2013, pursuant to the Standards on Bank Card Merchant Fees (the “Standards”), recently approved by the State Council. The Chinese interchange regime is less not… Read the rest

ECB Approves Oversight Expectations for Links Between Retail Payment Systems

Posted in Global Insights
From William James, Partner, Addleshaw Goddard On 23 November 2012 the Governing Council of the European Central Bank (ECB) approved the “Oversight expectations for links between retail payment systems”, which lay down Eurosystem oversight requirements with regard to links established by retail payment systems operating in the euro area. These… Read the rest

International & Cross-Border Payments Forum: Expanding Beyond North America

Posted in Global Insights
DWT partner Andy Lorentz moderated a panel at American Conference Institute’s Advanced Forum on International & Cross-Border Payments in New York, NY. The panel discussed Expanding Beyond North America: Key Considerations and Proven Strategies for Entering Into or Accepting Payments From New Markets, Including the EU, Asia, and Latin America… Read the rest

Regulation of Prepaid Cards offered by Non-Financial Institutions in China

Posted in Global Insights
On November 1, 2012, the Chinese government issued new payment service measures (“Measures”) governing payment services offered by “Non-Financial Institutions,” i.e., non-banks (click here for the Chinese text and click here for an English translation).  Anyone engaging in (i) payments through networks, (ii) the issuance and acceptance… Read the rest

WTO Panel Rules on Electronic Payment Services in China: What to Expect

Posted in Global Insights
On July 16, 2012, the World Trade Organization (the “WTO”) issued its panel report regarding certain measures affecting China electronic payment services (“EPS”). The report concludes that certain restrictions on the provision of such services violate WTO trade rules, but the report is not a wholesale victory for the United States and its effe… Read the rest

Citigroup Is First Global Bank Permitted to Issue Credit Cards in China

Posted in Global Insights
On 6 February 2012, Citigroup announced that it had received official approval from the China Banking Regulatory Commission (CBRC) to launch a proprietary credit card business in China. The business will cover both retail and commercial cards, and is likely to be launched later this year. On 19 March, Citigroup sold its stake in Shanghai Pudong Developme… Read the rest

Visa and China Union Pay: An Update on Their Struggle

Posted in Global Insights
Once upon a time, China Union Pay (“CUP”) was a department of the People’s Bank of China and needed help in establishing and maintaining a bank-card payment network in China. Visa provided CUP with this assistance, and CUP, together with various Chinese banks, became members of Visa. The first draft of CUP’s rules bore an uncanny resemblance to Vis… Read the rest

Payments in China: A Primer

Posted in Global Insights
Set forth below is a brief overview of payments in China. Later posts will provide updates as well as more detailed analysis of selected issues, in particular with respect to payment processing. Foreign Exchange Controls and Cross-Border Payments The Renminbi (RMB) is legal tender only within China’s domestic market. Foreign currencies may not be use… Read the rest

PBOC Grace Period for Third-Party Payment Processor Licenses Set to Expire

Posted in Global Insights
With the arrival of September 2011, the grace period for third-party payment processor licenses will soon end. The People’s Bank of China (the “PBOC”), the central bank of China, has issued 40 licenses in two rounds. Many existing third-party payment processors are still waiting for the next round of license release. However, the market expectati… Read the rest