Photo/Shetuwang

May 16 (NBD) -- A third-party payment firm in China was slapped with the largest fine in the sector year to date. 

Dinpay, one of China's 27 financial institutions qualified to handle cross-border payment, was fined about 14.53 million yuan (2.3 million U.S. dollars) and illegal gains of 11.08 million yuan (1.7 million U.S. dollars) were confiscated by the Shenzhen branch of People's Bank of China for violations of the payment and settlement rules.

In response, Dinpay said via its official WeChat account that upon the receipt of the notice of penalties, the company has set up a dedicated working group to take charge of the overall improvement. 

A few days prior to the central bank's decision, the company was fined around 15.91 million yuan (2.5 million U.S. dollars) by the Shenzhen branch of the State Administration of Foreign Exchange. 

The fines and confiscations in the two cases totaled 41.52 million yuan (6.5 million U.S. dollars).

According to an announcement released by the central bank Tuesday, Dinpay provided payment services for a number of overseas platforms that engage in illegal gold transactions and foreign exchange speculation online by the means of fabricating goods trade. Meanwhile, the company didn't take effective measures and technical means to check transactions of domestic merchants, some of which were found privately turning over their payment interfaces to illegal platforms engaging in spot trading and other transactions. 

According to ts.21cn.com, China's largest online complaint service platform, a user said in April he lost nearly 120,000 yuan (18,825.0 U.S. dollars) on the platform of a Hong Kong-based precious metal transaction company, to which Dinpay offered payment services. Another user said he lost more than 600,000 yuan (94,125.0 U.S. dollars) on several binary option platforms, of which over 220,000 yuan (34,512.5 U.S. dollars) was transferred via Dinpay. 

NBD tried to reach Dinpay via phone call, but no response had been received as of press time. 

In fact, in September 2017, the cross-border payment solution provider was also fined 90,000 yuan (14,118 U.S. dollars) by the central bank for similar violations.

Last year, the central bank made 109 penalty decisions against third-party payment companies, tripling the number in 2016, and the amount of fines totaled 28.2 million yuan (4.4 million U.S. dollars), according to data from PayCircle, China's leading payment industry portal. 

The tough supervision on third-party payment is continuing. 

In the first four months of this year, 22 penalty decisions were announced against payment companies including Alipay, Lakala, All in Pay, and Union Mobile Financial Technology, according to incomplete statistics on the information website of the peer-to-peer lending sector p2peye.com. 

Email: lansuying@nbd.com.cn