Core Viewpoint - The China Payment and Clearing Association has released the "Record Management Specification for Acquiring Outsourcing Service Institutions" to enhance self-regulation in acquiring outsourcing services, mitigate risks, and promote healthy market development [1][2] Group 1: Regulatory Framework - The "Record Management Specification" consists of eight chapters and thirty-four articles, covering general principles, application for record, information review and public disclosure, information management, cancellation of records, dispute handling, and disciplinary measures [1] - The specification clarifies the purpose, basis, scope of application, prerequisites for business operations, and principles for record-keeping [1] Group 2: Compliance and Management - It specifies the conditions for outsourcing institutions to be recorded, the required information and documentation, review standards, timelines, and circumstances under which records may be denied or rejected [1] - The specification outlines the requirements for changes in recorded institution information, data reporting, voluntary withdrawal processes, and circumstances for record cancellation by the association [1] Group 3: Risk Management and Self-Regulation - It emphasizes the management measures and self-discipline penalties for licensed institutions and outsourcing entities in violation of regulations, highlighting data security, confidentiality management, and work discipline [1][2] - The specification serves as a supporting self-regulatory framework for the "Self-Regulatory Management Measures for Acquiring Outsourcing Services," ensuring the practical implementation of the measures and promoting a standardized and healthy development of the acquiring outsourcing service market [2]

Core Viewpoint - The China Payment and Clearing Association has released two new regulations, the "Record Management Specification for Acquiring Outsourcing Service Institutions" and the "Evaluation Management Specification for Acquiring Outsourcing Services," aimed at promoting the standardized and healthy development of the acquiring outsourcing service market [1][4]. Group 1: Regulations Overview - The two specifications clarify the registration, information management, risk information sharing, blacklist management, and self-discipline evaluation processes for outsourcing institutions [1][4]. - The "Evaluation Specification" consists of six chapters and thirty-nine articles, detailing the self-discipline norms, registration requirements, risk information management, evaluation standards, and disciplinary measures for non-compliance [2][3]. Group 2: Risk Management - The "Evaluation Specification" identifies 30 types of risk behaviors, including administrative penalties for illegal operations, involvement in money laundering, and frequent changes in cooperation with licensed institutions [3]. - Risk levels are categorized into three grades based on the nature and severity of violations, with clear standards for blacklist management and risk information sharing [3]. Group 3: Implementation and Future Steps - The association plans to enforce the new regulations strictly, enhancing the management of acquiring outsourcing services throughout the entire process to maintain a fair and orderly market [6]. - The focus will be on improving transparency in the outsourcing service market, ensuring licensed institutions fulfill their management responsibilities, and facilitating the exit of illegal outsourcing institutions [6]. Group 4: Industry Impact - The new regulations are expected to accelerate industry reshuffling, particularly affecting high-risk small outsourcing institutions, thereby addressing issues of hollowing out in third-party payment channels [3][6]. - Long-term, institutions with strong compliance capabilities and high technical standards will gain more business opportunities, shifting the competition from price to compliance and technology [7].

Core Insights - The acquiring outsourcing service industry is facing an unprecedented compliance crisis, exposing risks to payment security, consumer rights, and financial stability [1][3] - Regulatory measures have been introduced to address industry issues, but a long-term governance mechanism is still needed to effectively tackle these problems [1][3] Regulatory Challenges - Recent regulatory actions target the root causes of industry malpractices, including credit card cash-out advertisements and the freezing of merchant funds due to multi-layer outsourcing [1] - Some payment institutions outsource core operations without establishing effective entry review and dynamic management mechanisms, leading to illegal transactions such as cash-out and money laundering [1][2] Outsourcing Risks - The pursuit of profit by some outsourcing agencies has led to dangerous practices, including incentivizing merchants through "distribution rebates" and "zero fees," resulting in a vicious cycle of poor quality driving out good [1][2] - The misuse of technology has exacerbated risk proliferation, with some aggregating payment service providers encouraging outsourcing through system loopholes [1] Governance Recommendations - A three-dimensional approach involving "regulation - institutions - technology" is essential for addressing the chaos in acquiring outsourcing [1][2] - Regulatory bodies should enhance penetrative supervision and connect outsourcing institution records with anti-money laundering systems for risk prevention [1][2] Institutional Responsibilities - Licensed acquiring institutions must take on primary responsibility and avoid a "hands-off" approach, implementing a "white list" system for outsourcing partners [2] - Regular assessments and on-site inspections of outsourcing institutions should be conducted to ensure compliance and technical capability [2] Technological Empowerment - Technology is key to improving governance efficiency, with regulatory bodies encouraged to establish information-sharing platforms for outsourcing institutions [2] - Acquiring institutions should leverage big data and AI to enhance risk control systems and monitor merchant transaction data in real-time [2] Future Outlook - The future of acquiring outsourcing services relies on a dual drive of compliance and innovation, necessitating a comprehensive regulatory framework [2][3] - Encouraging positive technological advancements can help shift outsourcing institutions from low-quality competition to high-value service innovation [2]

Core Viewpoint - The China Payment and Clearing Association has introduced new regulations to enhance self-regulation in the acquiring outsourcing service sector, aiming to standardize payment outsourcing practices and mitigate risks associated with acquiring services, thereby promoting a healthy development of the payment service market [1] Group 1 - The newly released regulations include the "Regulations on the Filing Management of Acquiring Outsourcing Service Institutions" and the "Regulations on the Evaluation Management of Acquiring Outsourcing Services" [1] - These regulations will take effect immediately upon publication [1]

Core Insights - The third-party payment acquiring outsourcing service market is experiencing a significant exit of institutions, with 2,280 institutions having their registrations invalidated as of May 21 [1][3][4] - The invalidation of registrations is attributed to compliance issues and a shift in focus towards core payment operations, leading to a lack of actual engagement in acquiring outsourcing services [4][6][7] Group 1: Registration Status - A total of 32,356 institutions have successfully registered for acquiring outsourcing services, with 22,280 institutions having invalidated registrations [1][3] - Among the invalidated registrations, 2,084 institutions can no longer conduct merchant recommendation services, while 1,046 cannot perform acceptance mark posting, and 1,522 are unable to maintain merchant services [3][5] Group 2: Regulatory Environment - The China Payment and Clearing Association has implemented various regulations, including the "Management Measures for the Registration of Acquiring Outsourcing Service Institutions," to enhance compliance and management within the industry [6][7] - The regulatory framework emphasizes that institutions must maintain compliance to avoid invalidation of their registrations, reflecting a trend towards stricter oversight in the acquiring outsourcing market [6][7] Group 3: Industry Trends - The industry is witnessing a consolidation trend, with a focus on compliance and the establishment of higher entry barriers for new players, which may accelerate the concentration of leading firms [6][7] - The ongoing evolution of the payment industry necessitates that registered acquiring outsourcing institutions prioritize compliance and high-quality service delivery to small and micro merchants [7]