PBOC Draft Rules Cap Prepaid Cards at 5,000 RMB Registered, 1,000 RMB Unregistered, 200 RMB Online

The People's Bank of China has issued a draft of the "Stored Value Account Operations Type II Business Management Rules" for public comment. The regulation targets prepaid cards issued by non-bank payment institutions, which constitute Stored Value Account Operations Type II business. The rules stipulate that the balance limit for a single registered prepaid card shall not exceed 5,000 RMB, and for an unregistered card, not exceed 1,000 RMB. A purchaser buying more than 10,000 RMB of unregistered cards in a single transaction must provide real-name identification. Credit cards may not be used to purchase prepaid cards. Registered prepaid cards must support loss reporting, be redeemable, and have no expiration date. Unregistered prepaid cards must have a validity period of at least three years. Prepaid cards may not be overdrawn or used to withdraw cash, and funds on the card may not be transferred to bank accounts or payment accounts opened by institutions other than the issuing prepaid card institution. In principle, prepaid cards must be issued and sold through physical outlets. Only in small-value convenience scenarios such as public transportation may card purchase and top-up be conducted via proprietary online platforms, with a limit of no more than 200 RMB per card and no more than 10,000 RMB per person per year.

The rules abolish the split model of issuance and acceptance, requiring that all special merchants be contracted directly by licensed institutions. Core businesses such as fund control, merchant due diligence, and transaction risk control may not be outsourced. The rules add dual on-site verification of merchant registered address and business address. Merchant settlement funds must be transferred through clearing institutions designated by the central bank. Institutions' own funds and prepaid card reserves must be kept in separate accounts, and pre-collected funds must be fully and timely deposited into the centralized reserve account. The draft also clarifies that this revision is a supporting requirement to implement the "Regulation on the Supervision and Administration of Non-bank Payment Institutions" and the "Anti-Money Laundering Law," and aims to improve the system in response to issues such as the proliferation of virtual cards and business outsourcing risks in the prepaid card industry.