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China Central Bank Halts Online Payments Based on QR Codes

03-14 13:42 Caijing
The suspension came a day after CITIC Bank announced that the bank planned to partner with Alibaba and Tencent to issue virtual credit cards based on QR code payments.

China's central bank has ordered Internet giants Alibaba and Tencent to stop processing online payments using QR codes due to security risks, the two companies said Friday.

The suspension came a day after CITIC Bank announced that the bank planned to partner with Alibaba and Tencent to issue virtual credit cards based on QR code payments.

Both Alibaba and Tencent have launched online payments services named Alipay and Caifutong respectively.

A source from CITIC said the People's Bank of China (PBoC)'s move is due to security concerns as virtual credit cards and payment made via QR codes are difficult for the central bank to regulate.

CITIC said it is communicating with the central bank and waiting for further notices. 

CITIC shares plunged over 9 percent while Tencent shed 5 percent in Friday's morning trading session.

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