The Cabinet yesterday approved a draft act governing third-party payment services like US-based PayPal Inc, moving the proposed bill to the legislature for review.
According to the draft, online payment service providers will be allowed to receive and make payments on behalf of clients, provide virtual accounts through which clients can store funds, and transfer funds electronically.
It sets the minimum capital for third-party payment providers at NT$300 million (US$10.04 million), while the maximum value of funds stored and transferred per transaction is limited to NT$30,000, the bill stipulates.
The draft act covers both dedicated service providers and semi-dedicated providers, such as banks and operators of electronic stored value cards.
Overseas institutions will be required to obtain licenses from Taiwan’s authorities before providing online payment services in the country, the bill states.
Financial Supervisory Commission (FSC) Chairman William Tseng (曾銘宗) predicted that after the law is passed by the Legislature, five to 10 domestic companies will apply to launch online payment services.
He said online payment service providers from China will also be allowed to operate in Taiwan as long as they obtain permits from local authorities.
The government is still working on the eligibility requirements for Chinese companies and will consult on the issue with Beijing, he said, adding that the matter should be dealt with based on “reciprocity.”
Meanwhile, the indicted operator Addcn Technology Co (數字科技) will not be off the hook because the bill is not retroactive, Tseng said.
That means Addcn cannot expect the bill to help its fight against the charges of violating the Act Governing Issuance of Electronic Stored Value Cards (電子票證發行管理條例).
According to prosecutors, Addcn took NT$18.6 billion in funds from users on 8591.com, which specializes in the trading of virtual products and credits for computer games, between 2009 and February last year without authorization.
The online platform operator has maintained that it was not involved in any illegal fund-soliciting and is willing to cooperate to offer prosecutors better insight into how the third-party online payment business operates.
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