3rd party providers must pay NT$10 bil. for e-banks: FSC

By John Liu, The China Post

TAIPEI, Taiwan — Third-party payment providers will have to fork out NT$10 billion in funds if they want to establish themselves as electronic banks, said Financial Supervisory Commission (FSC) Chairman Tseng Ming-chung (���ʩv) yesterday. Tseng made the comment in a legislative session to review a draft on the management of electronic payment institutions. The industry’s needs center on funds transmission and savings, which are perfectly acceptable, however, a couple of players want to use this opportunity to form electronic banks, which is not acceptable, Tseng said. The remark was directed toward PChome Chairman Jan Hung-tze (�⧻��), who wants to turn his company into Taiwan’s Alipay, a third-party online payment platform launched by China’s Alibaba Group. Jan will have to supply NT$10 billion and submit a bank formation application, before establishing an electronic bank, Tseng said. Jan’s Outrage over FSC Position The FSC has charged the Bankers Association of the Republic of China with the responsibility to review and draft the related bills. This decision enraged PChome’s Jan, who said that the FSC and the Bankers Association were cutting backroom deals. The legislation may have an adverse impact on banks, since the bills will enable the non-finance sector to provide financial services. As such, the Bankers Association should not be tasked with the drafting, Jan said. What further enraged Jan is that the Bankers Association tried to seek advice from online businesses in mainland China, instead of local merchants.

��We are useless,�� Jan said sarcastically. The FSC is the reason that Taiwanese merchants are unable to conduct online payments, finance and insurance. However, the government agency criticized local merchants for lack of experience, Jan grumbled. Kuomintang lawmaker Lu Shiow-yen (�c�q�P) pointed out in the Legislature that it is inappropriate to task the Bankers Association with the drafting process. The reason is that banks and third-party payment providers are competitors with each other, she said. Lu suggested that the FSC establish a competent authority to oversee third-party payment-related business. Tseng said that he supports the idea because of e-commerce’s great prospects. Jan a Bit Too Anxious: Vice Premier The Bankers Association said it was charged with the drafting responsibility since there are no online third-party payment business associations. It will invite third-party payment players to public hearings and solicit feedback, the association said. The newly appointed vice premier, Chang San-cheng (�i���F), also provided his feedback on the issue yesterday. The FSC is due to have conversations with third-party payment players, Chang said, adding that ��Mr. Jan is a little bit too anxious.�� However, Jan is right when it comes to the need for communications, Chang added. The Bankers Association made a ��sincere suggestion�� to the FSC yesterday, saying that third-party payment players should be tasked with the drafting process, and financial players should instead attend public hearings. The FSC responded later that it will take over the drafting of the legislation.