Platforms must never collect payments themselves and then transfer them to sellers; funds must be settled directly via a licensed payment institution.

No monetary cost is involved. However, it requires some time to integrate a product from a licensed payment institution — that is, a company holding a payment license issued by the People’s Bank of China. By using such institution’s split-payment or escrow features, buyer payments are transferred straight to sellers without ever entering the platform’s own accounts.

According to regulations, a payment business is defined as “transferring monetary funds based on electronic payment instructions submitted by payers or payees.” In other words, it involves moving money on behalf of others per their instructions. To operate such a business, one must obtain a payment license from the People’s Bank of China, and the minimum registered capital must be 100 million RMB, paid in full. Unauthorized operation results in immediate closure, seizure of all profits, and fines ranging from 500,000 to 2 million RMB if no profit was generated or if profit fell below 500,000 RMB; additionally, a further fine of 100,000 to 500,000 RMB applies to legal representatives and responsible personnel. Criminal law also classifies “illegally conducting fund payment and settlement services” as illegal business activity; serious violations may lead to imprisonment of up to five years, while especially grave cases incur sentences exceeding five years. As of May 2024, the threshold for “serious” violations is defined as total illegal transaction volume exceeding 5 million RMB or illegal profits surpassing 100,000 RMB nationwide.

国务院 (2023). 非银行支付机构监督管理条例（国务院令第 768 号，第二、六、八、二十七、四十七条）. https://www.gov.cn/gongbao/2024/issue_11086/202401/content_6924970.html ; 中国人民银行 (2024). 非银行支付机构监督管理条例实施细则（中国人民银行令〔2024〕第 4 号，第六十八条）. https://www.gov.cn/gongbao/2024/issue_11546/202408/content_6970979.html ; 全国人大 (1997). 刑法（第二百二十五条第三项）. https://www.spp.gov.cn/spp/fl/201802/t20180206_364975.shtml ; 最高人民法院、最高人民检察院 (2019). 关于办理非法从事资金支付结算业务、非法买卖外汇刑事案件适用法律若干问题的解释（第一、三、四条）. https://www.spp.gov.cn/xwfbh/wsfbt/201901/t20190131_407161.shtml

Designing the payment flow so that funds never enter the platform’s account is the sole safe method. In industry parlance, this practice is sometimes called “second clearing,” though this term does not appear in official documents; instead, regulations refer to it as “indirectly engaging in payment services.” The Supreme People’s Court and Supreme People’s Procuratorate explicitly list only three scenarios as illegal: fabricating transactions for cash-out, using corporate accounts for cash-out, and using cheques for cash-out. Platform-based collection and redistribution of payments are not explicitly named, so this description strictly follows statutory wording without asserting that it automatically constitutes a crime.