SAFE Launched the Pilot Operation of Cross-Border Foreign Currency Payments to Support the Development of E-Commerce

March 6, 2015

By: Greg Pilarowski

On January 20, 2015, the State Administration of Foreign Exchange (国家外汇管理局) (“SAFE”) issued the “Notice on the Pilot Operation of Cross-Border Foreign Currency Payments to Be Conducted by Payment Agencies (关于开展支付机构跨境外汇支付业务试点的通知)”[1], which announced the nationwide launch of the pilot operation of cross-border foreign currency payments. The pilot program will be conducted by select payment agencies that are authorized to provide foreign exchange payment and settlement for parties to a cross-border e-commerce transaction. The Circular includes the following main provisions:

1.  Increase of Single Transaction Limit. The value limit for a single online shopping transaction has been increased from the monetary equivalent of US$10,000 to US$50,000.

2.  Standardization of Procedures for Pilot Operation. In order to qualify as a participant in the pilot operation, a payment agency must first register in the “Catalogue of Enterprises Engaged in Trade Foreign Exchange Payments and Receipts” at the foreign exchange authority in the domicile of such agency.

3.  Strengthening Risk Control. Payment agencies are required to strictly perform their obligations to (a) verify the authenticity of transactions, (b) maintain the relevant transaction records for five years, and (c) accurately report the relevant business data and information in a timely manner.

Currently, only PRC domestic companies are allowed to serve as payment agencies to operate the cross-border foreign currency payments in China. Pursuant to the notice mentioned above, in order to operate the business related to cross-border foreign currency payments, the payment agencies are required to register in the Business Directory for Foreign Exchange Receipts and Payments in Trade (贸易外汇收支企业名录). [2] In addition, to obtain such registration, payment agencies must have already obtained the Payment Business Permit (支付业务许可证) issued by the People’s Bank of China (中国人民银行), however, these Payment Business Permits are only issued to PRC domestic companies.[3]


[1] See SAFE website for reference.

[2] See Article 4 of Notice on the Pilot Operation of Cross-Border Foreign Currency Payments to Be Conducted by Payment Agencies (关于开展支付机构跨境外汇支付业务试点的通知).

[3] See Article 8 of Administrative Measures of People’s Bank of China on Payment Services Provided by Non-financial Institutions (非金融机构支付服务管理办法) issued by People’s Bank of China in September 2015.