Premier Jiang Yi-huah at this morning's Cabinet meeting finalized the government's third-party payment policies, affirming their legality and calling for services to be provided as soon as possible.
Jiang directed the Financial Supervisory Commission (FSC) to promote the establishment of an online stored value account system through the Bankers Association of the Republic of China to enable banks and third-party payment businesses to cooperate on offering these services.
In the short term, the Act Governing Issuance of Electronic Stored Value Cards will suffice as the legal foundation for non-financial institutions to provide third-party online payment services. For the long run, however, an act to specifically manage third-party payment services for e-commerce should be enacted, Jiang said.
The premier made these decisions after hearing reports and recommendations from ministers without portfolio Schive Chi and Chang San-cheng and having thorough discussions with ministers in charge of related responsibilities.
Article 14 of the Act Governing Issuance of Electronic Stored Value Cards states that transactions using such cards may be made either online or offline. This definition clearly covers online stored value accounts, the Executive Yuan said. Therefore, the Act already applies to third-party payment services, and non-financial institutions can offer online stored value accounts provided the regulations below are also followed:
1. Firms engaging in third-party payment services are required to cooperate with dedicated issuers of electronic stored value cards as stipulated in Article 7 of the Act. They may not issue such cards themselves. However, they can establish an institution exclusively devoted to the issuance of such cards.
2. Electronic stored value accounts can only be used for making purchases. Sellers must receive payments in ordinary accounts. This will ensure that the stipulation in Article 5 of the Rules Governing the Business of Electronic Stored Value Card Issuers that "the transactions of electronic stored value cards do not include fund transfer between the cards" is not violated.
3. In light of the use of credit cards in third-party payments, firms offering such services should become contracted service providers of electronic stored value cards (rather than individual sellers serving as contracted payment providers under a customer-to-customer transaction model).
The government has no immediate plans to amend the Act Governing Issuance of Electronic Stored Value Cards; instead it will consider making appropriate adjustments after witnessing enough practical applications of the law as written.
As such, the maximum amount allowed in electronic stored value accounts will remain NT$10,000 (US$334), while firms offering such services must have at least NT$300 million (US$10 million) of paid-in capital.
To fully guarantee consumer protection, Premier Jiang instructed the Ministry of Economic Affairs (MOEA) to set forth the matters to be included in and excluded from standard form contracts for third-party payment services in accordance with Article 17 of the Consumer Protection Act. The MOEA was also instructed to propose amendments to the Money Laundering Control Act to prevent the use of such services for crime.
Moreover, the premier requested Minister Chang to coordinate relevant agencies' assistance to ensure the security of online transactions in accordance with Article 12 of the Regulations Governing the Security of Electronic Stored Value Cards and to make certain of the security strength of dynamic password generators.
In addition to the above near-term measures, the MOEA was directed to draw up special legislation for e-commerce third party payment service management. This law should focus on both industry development and cash flow management and fall under the jurisdiction of both the MOEA and the FSC, the premier said.
The MOEA, FSC and related ministries will create task forces, establish industry consultation mechanisms and study relevant legislation from other countries. With third-party payment service management guidelines and special legislation outlines researched and proposed by the MOEA as its basis, all new legislation is expected to be presented to the Executive Yuan by the end of this year.
Opening third-party payment services to non-financial institutions is in line with international trends and is expected to spur inter-industry competition in the field, encourage firms to play to their strengths and stimulate the diversification and creativity of e-commerce, Executive Yuan officials remarked.
The completion of management and legal structures for third-party payment is expected to create momentum for electronic and online industry growth and new business opportunities through cooperation between financial and information services.
Third-party payment is just one element of e-commerce, officials noted. The MOEA has been enjoined to set its sights on a law or program for comprehensive e-commerce development.
Additionally, as media have reported in recent days, there have been cross-strait consultations about the blocking of Taiwanese e-commerce sites on the mainland. Officials maintained this is another major effort which would be just as influential as the opening of online stored value accounts and should receive the attention and support of every sector.
Finally, the government assured it will continue to improve the environment for online industry and proactively remove bottlenecks to domestic and international e-commerce market development to gear Taiwanese firms toward innovation and globalization.