Alipay to stop online account recharge via credit card

China's leading online payments company Alipay yesterday stopped the service of recharging accounts with credit cards, a move to comply with a new draft regulation on online payments.

"The step is intended to improve the management and development of the online payments system," Alipay said on its official website yesterday, urging users to make online payments directly with their credit cards or recharge their accounts with debit cards.

Alipay has not witnessed a significant affect of the move on users so far, a staff from the company's publicity department told the Global Times yesterday on the condition of anonymity.

Tenpay, the online payments unit of Tencent, also stopped the service from February 1.

Both companies took the steps after the People's Bank of China (PBC) issued draft administrative measures on online payments on January 5, requiring that users register for payment accounts with their real identities and avoid overdraft on credit cards to recharge their accounts.

The PBC's draft shows the bank is strengthening risk control in the booming online payments sector, said Zhang Meng, a researcher with market research firm Analysys International.

"Although users would feel unaccustomed at the beginning, Alipay's cooperation with banks to raise payment limits would help solve such a problem," he said.

Alipay announced an increase in the limit of each payment for China Merchants Bank's credit card users to 2,000 yuan ($317.8) from 500 yuan beginning February 3, and the Alipay staff said the company is in discussion with more banks to raise such limits.

Both Alipay and Tenpay have alternative products, so their business would not be affected; instead, this is an opportunity for them to offer and enhance alternative payment methods, said Wang Weidong, a third-party payments analyst at Beijing-based iResearch Consulting.

China's third-party online payments market had a transaction size of 2.2 trillion yuan in 2011, up 118.1 percent over the previous year, according to data released by iResearch in January.