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China's central bank to regulate QR code payment

China's central bank plans to regulate QR code payment in a bid to contain risks arising from the popular payment service, Xinhua News Agency reported Dec. 27.

The People's Bank of China will require payment companies to secure permits before offering barcode-based payment services, the report said, citing a document released by the regulator. Financial institutions will also be required to channel cross-bank transactions involving barcodes through the regulator's clearing system or any other legal clearinghouses.

Further, the central bank will require institutions offering the payment service to improve security in order to prevent data breaches.

The new rules will take effect April 2018 under a trial run.

Barcode-based payments have been rising in popularity in China, prompting the central bank to address potential concerns such as security issues and unfair market competition.