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Gov't mulls third-party utility payments

TAIPEI, Taiwan -- The Ministry of Economic Affairs (MOEA) yesterday announced that its draft proposal of laws governing third-party payment platforms will be completed and submitted to the Legislative Yuan for approval before the end of this week at earliest.

Most notably, reports indicate that the R.O.C. Central Bank, the MOEA and other regulators and governing bodies are inclined to allow payments of household utilities bills via third-party payment platforms.

The proposal will waive the NT$30,000 deposit amount limit, allowing consumers to buy anything from diamond rings to 60-inch TVs in a single lump sum with no ceiling set on the total purchasing amount in each transaction, according to the MOEA.

In addition, Financial Supervisory Commission (FSC) Chairman Tseng Ming-chung (曾銘宗) last week met with PChome Online Inc. Chairman Jan Hung-tze (詹宏志) to exchange opinions regarding requirements on the capitalization, deposit amount limit, and scope of included services relating to third-party payment operations. Along with other Internet companies, Jan had appealed for approval of handset-based services -- by which consumers may utilize third-party payment services by establishing network connections via their handsets at retail locations. Government officials however, stated that as this service would involve an overhaul in laws governing Taiwan's financial supervision systems, its approval would prove difficult.

Concerns Hamper Third-party Payment Platform Approval

On the scope of services included, Chang stated that household utilities bills, parking and other fees derived from use of public resources represent the ideal applications for the fledgling platform. Previously, the central bank and the FSC had stated that laws governing third-party payments are designed for the domain of online transactions, which does not include payment of fees for use of public resources. The two governing bodies, however, have since shifted their stance, and are no longer concerned that the lucrative market for utility-bill-payment services hosted by banks would be threatened by third-party platform upstarts, according to reports.

Government officials also expressed concern over likely impacts to Easycard (悠遊卡) revenues, which are usable for payment processing at major convenience store chains in addition to the MRT system. In contrast to upcoming third-party payment platforms, Easycards employ a proprietary system, and are only usable at larger-scale retailers with capitalization exceeding NT$60 million. In addition, the seemingly more lenient regulatory limits on upcoming third-party payment platforms may also threaten the revenues of Web-based retailers who utilize the more stringently regulated electronic receipt system, said government officials, adding that resolution of difficulties among competing systems will require sweeping amendments by the FSC.

On businesses' appeals to raise the deposit amount limit from NT$30,000 to NT$50,000, government officials stated that the move may not be in the interest of consumers, as they do not receive interest payments for depositing considerable sums of cash.

In response to concerns that the NT$300 million capitalization requirement for companies wishing to participate in the scheme may limit opportunities for young entrepreneurs and startup companies, officials stated that they do not plan to issue a large number of third-party payment licenses, saying that the field only needs a small number of well-equipped operators.

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