The central bank of China pledged to unveil strict crackdown measures aimed at payment service providers associated with channeling funds for unlawful cross-border gambling operations. It also made a vow to fix the existing loopholes in the country’s gambling sector that has recently been shaken by problems and scandals.
At a meeting with key payment industry stakeholders and a number of central government departments that took place on June 11th, Fan Yifei, a deputy governor of the People’s Bank of China (PBOC), has revealed that blocking the channels used for the provision of funds for illegal gambling services has been one of the top priorities of the central bank. China’s central bank issued a statement regarding the measures following some of its previous steps toward stricter regulatory oversight of payment service providers over the last few years in various areas.
At the meeting, the central bank’s deputy director made a promise to make everything possible to crack down the companies that serve customers involved in illegal activities associated with gambling and called for gambling industry players to make sure they stick to strict customer identification practices, reporting large and suspicious financial operations related to gambling services, as well as identification of individuals who withdraw funds from their accounts.
Allscore Payment Service Faced Record-High Fine in April 2020
Earlier this year, the Beijing brand of the People’s Bank of China imposed a record-high financial penalty on a local payment company, Allscore Payment Service, following allegations that it has been involved in illegal gambling operations.
The move has been made as part of the tightening measures of the country’s financial regulators on the industry. At the end of April, Allscore Payment Service faced a record-high financial punishment imposed on the country’s central bank. The payment company suffered a 65.9-million yuan fine and had 50.1 million yuan of the gains accumulated through the illegal activity confiscated.
As mentioned above, the record-high monetary fine followed findings that some industry players have participated and facilitated illegal gambling businesses and taken hold of customer deposits. The penalty faced by Allscore Payment Service broke a previous record of a 61.2-million yuan penalty that was imposed by the Shenzhen branch of the PBOC on another payment services provider operating in the country – Shenzhen RYX Infotech.
The punishment was unveiled about six months after Allscore Payment Service made a deal under which much of its stock acquired by Wirecard AG, a payment services provider based in Germany. In April, the company was punished mainly for providing payment services for illegal gambling websites, with unlawful gains amounting to more than 50 million yuan. As a result of the company’s transgressions, the Chairman of Allscore Lin Yao was also fined 450,000 yuan for being involved in the violations.
For the time being, providing payment services for illegal operations is considered one of the most serious regulatory violations in the Chinese payment sector.
