Some more info about the payment processors being stopped in China:
http://ca.news.yahoo.com/china-central-bank-orders-halt-online-payments-using-034119459--sector.htmlHONG KONG/BEIJING (Reuters) - China's central bank demanded on Friday that payments made by scanning a bar code with mobile devices be halted, hitting the payment arms of Internet companies Tencent Holdings Ltd and Alibaba Group Holding, amid concerns over the security of their verification procedures.
The move is the latest in a series of clashes between China's finance sector and Chinese Internet companies, which have pushed into the banks' territory by ramping up their own financial services, offering online payment services and wealth management products.
Tencent, China's largest listed Internet company, and e-commerce firm Alibaba confirmed to Reuters that they had received a notice from the People's Bank of China (PBOC) about the move.
A PBOC spokesman said the bank is asking the companies to submit detailed reports on their procedures.
"The notice was issued all of a sudden ... This notice had a great impact on our business," said an official from Alipay, Alibaba's online payment affiliate, who declined to be identified as they were not authorized to speak to the media.
The PBOC document was issued "in order to protect the payment service market, and prevent payment risks", a source who saw the notice told Reuters.
Shares of Tencent slid as much as 7 percent in Hong Kong.
China CITIC Bank Corp suspended trading of its shares after the stock fell 8 percent in Shanghai and 7 percent in Hong Kong. China CITIC Bank has said it will operate virtual credit cards with Tencent and Alibaba that use the payment process, known as a "QR" code.
QR codes are bar code-like images that can be used to transmit web addresses, payment details, or other information.
China CITIC Bank told Reuters it had not received any document from the PBOC.
Analysts said other new offerings or technology could also be at risk.
"It is a negative sign to the market. The central government steps in to control a supposedly very free and innovative area of business. That means even if it is an innovative segment, it is not as free as we have anticipated," said Alex Wong, a director at Hong Kong-based brokerage Ample Finance Group.
MARKET JITTERS
China's mobile payment market recorded 1.22 trillion yuan ($199 billion) in transactions in 2013, according to Beijing-based data firm iResearch.
While some analysts said QR payment technology is in its infancy, iResearch said QR code payments would be a driving force in the mobile payment market this year, although it currently had no specific data for QR payments.
In February, Alipay said it handled 900 billion yuan in mobile payment transactions from more than 100 million users last year, completing more mobile payments than U.S.-based PayPal and Square Inc combined.
The PBOC said in December it would closely monitor the development of online financial services to ensure companies do not cross any legal red lines.
"If the government is pushing back on the QR code thing, it's probably a temporary thing until the government figures out what is going on," said Michael Clendenin, managing director of Shanghai-based RedTech Advisors.
China's Internet companies have repeatedly clashed with entrenched interests in the finance sector, as companies like Tencent, Alibaba and Baidu Inc push further into their territory.
In August, Chinese media reported that Alipay halted its offline point of sales service for small companies.
The move came after state-owned China UnionPay, the country's monopolistic credit card provider, put pressure on Alipay to route the service through UnionPay's system so it could increase its commission earnings on transactions.
Tencent and Alibaba said this week they are applying for licenses from the bank regulator to participate in a trial plan for privately-owned banks. Both firms have announced they would launch virtual credit cards.
These virtual cards allow customers to use credit to pay for products through Tencent and Alibaba's payment arms.
(Additional reporting by Paul Carsten and Alice Woodhouse in HONG KONG and; Pete Sweeney and Gabriel Wildau in SHANGHAI; Editing by Anne Marie Roantree & Kim Coghill)