Beijing - XINHUA
The People's Bank of China (PBoC), the central bank, has suspended the use of virtual credit cards and payments via code scanning over security concerns, an official told Xinhua on Friday.
Zhou Jinhuang, vice director of the PBoC's payment and settlement department, said the central bank has issued a notice to suspend Tencent and Alipay's virtual credit cards and payments by scanning a bar or QR code.
"It's just a suspension, rather than a prohibition," said Zhou, adding that the decision is aimed at regulating business in the sector and safeguarding consumers' interests, not targeting any specific company.
Zhou said PBoC is always supportive of innovation in the finance sector, but payments via code scanning and virtual credit cards are closely linked to consumers' personal information and financial safety and therefore need further consideration.
Consumers filed complaints that their personal information and money were stolen during code scanning payments, according to Zhou.
China CITIC Bank announced on Tuesday it will partner with Tencent and Alipay under Alibaba to issue online credit cards.
Alipay aimed to issue one million virtual credit cards with a minimum credit line of 200 yuan (32.6 U.S. dollars). The service was expected to appear next week on Alipay Wallet, a mobile app that allows users to invest in a wealth management product called Yu'ebao and make online payments by scanning a digital code.
Tencent also planned to issue one million such cards.
Tencent's Hong Kong-listed shares tumbled more than four percent over the suspension during Friday trading, and China CITIC Bank's Shanghai-listed stocks dived 8.26 percent before trading was halted by noon. Alipay is not a public firm.