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China plans clearing house for online transactions

China's central banks will tackle fraud by setting up a clearing house for online transactions, China Daily has reported.22 Aug 2016

The People's Bank of China has approved plans proposed by the Payment and Clearing Association of China for the platform and its management, China Daily said.  

The platform is expected to launch next year, with a guarantee fund that can be used to cover losses, the central bank said, according to China Daily

All third-party online payment providers will be under the regulation of the clearing house, including foreign payment providers operating in China.

Zhao Ying, a senior official with the central bank's Chengdu branch, told China Daily that the move will improve information transparency and security.

"A unified platform would do a better job and will verify the identity of clients," she said.

"Establishing a centralised depository system will fundamentally prevent payment institutions from misappropriating the money and using it for loans, investment or wealth management," Zhao told China Daily.