Another payment service provider has had its license revoked by the central bank.
According to the latest update on the central bank's official website, the payment license of Shanghai Shanglianxin Electronic Payment Service Co., Ltd. has been cancelled.
This marks the fourth payment license revoked by the People's Bank of China this year, following the earlier cancellations for Henan Huiyinfeng Information Technology Co., Ltd. (now Henan Jubao Payment Co., Ltd.), Guangdong Huika Business Service Co., Ltd., and Kailiantong Payment Service Co., Ltd.
Anticipated Industry Exit
The license cancellation for Shanghai Shanglianxin was widely anticipated within the industry. As early as 2021, the central bank suspended its review of the company's license renewal application, and the recent cancellation notice cited a decision not to renew its license.
An industry analyst noted that the revocation was expected as the company had long failed to complete the renewal process and its business operations were stagnant, no longer meeting the fundamental requirements for continuous operation and compliant business conduct for payment institutions. The regulatory move to clean up such "shell" or inefficient entities aims to optimize industry structure and enhance overall compliance levels.
Ongoing Regulatory Scrutiny
The revocation is not an isolated incident this year, as regulatory actions, including license cancellations and significant fines, have been frequent. On the same day the license cancellation was announced, the Guangdong branch of the People's Bank of China issued a public notice imposing penalties on Guangzhou Huiju Payment Electronic Technology Co., Ltd. The penalties included a warning, public criticism, confiscation of illegal gains amounting to approximately 1.13 million yuan, and a fine of about 3.4 million yuan, resulting in total penalties exceeding 4.5 million yuan.
The substantial penalties against Huiju Payment primarily stemmed from violations of payment settlement management regulations. This type of enforcement action demonstrates that regulators maintain a high level of vigilance regarding substantive risk points in the daily operations of payment institutions, with particular emphasis on fund security and transaction authenticity. The combination of a license revocation and a major fine illustrates the regulatory logic of implementing a full-cycle, closed-loop management approach for the payment industry, covering both market entry and exit mechanisms as well as enforcement and disciplinary measures. Previously, several other payment institutions have also faced penalties for issues such as non-compliance with anti-money laundering regulations.
Industry Consolidation and Future Direction
Industry experts believe that China's payment sector is entering a period characterized by stringent regulation and deep industry consolidation. The acceleration of license revocations and the frequent issuance of large fines signal a significant trend of industry cleanup. The cancellation of Shanghai Shanglianxin's license is viewed as a typical case of the industry's strict regulatory environment and the principle of survival of the fittest, sending a clear regulatory message. The company's long-suspended renewal application, stagnant business, and operational and compliance risks ultimately led to the non-renewal and license cancellation, aligning with the logic of industry rationalization.
Following this latest exit, the total number of revoked payment licenses in China has reached 112.
For the industry, this trend is expected to further encourage institutions to return to the core function of payments, focus on compliance and risk control, accelerate the exit of small, weak, and non-compliant players, and promote the standardized, stable, and high-quality development of the payment sector. As a critical component of financial infrastructure, responsible for core functions like fund circulation and transaction clearing, the stability and compliance of the payment industry directly impact the operational efficiency and security of the entire financial system.
Stringent regulation is not intended to stifle innovation but rather to standardize market order, prevent systemic risks, protect user fund security, and create a fair competitive environment for high-quality institutions. It is anticipated that future regulatory efforts will continue to strictly control baseline risks while encouraging payment institutions with strong technological capabilities, solid compliance foundations, and advantages in scenario synergy to participate in a broader financial services ecosystem, steering the industry from scale expansion towards high-quality development.
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