On the one hand, that amounts to a public admission that China’s electronic payment fraud control systems are inadequate. On the other hand, it’s a clear move by the central bank to put a cap on fraud until they can figure out something better.
Given the trends I’ve seen in e-commerce in China, this is only going to adversely affect a very tiny percentage of transactions, as most sales online at this point are fairly small.
For larger stuff, I suspect we’re going to have to go back to my personal favorite payment system, commercial COD via the Express Mail service – a safer bet for all concerned given the fact that China’s system needs considerable time and investment to catch up to the speed of electronic transactions.
Good on the PBOC for stepping in. Now, lets get to work on better systems, eh, boys?