Most Read Contributor in Hong Kong, September 2016
Greater scrutiny of financial institutions and contactless
credit card payments is now the norm against the backdrop of
increasing cybersecurity threats. While financial institutions are
clearly subject to stringent regulations on their handling of
customer data and money and security obligations, there was no
control over new entrants to this market, whose main sphere of
activity is non-financial, nor was there any control over the way
they could conduct their payment activities. Customer information
held by these companies, and money stored on their facilities, are
just as vulnerable (maybe even more so) to theft and cyber attacks
as is the data held by financial institutions. It no longer made
sense to leave this area unregulated.
On 13 November 2015, the new regulatory regime for stored value
facilities and retail payment systems came into operation under the
Payment Systems and Stored Value Facilities Ordinance (formerly the
Clearing and Settlements System Ordinance). The Payment Systems and
Stored Value Facilities Ordinance introduces new regulations for
all non-financial institutions that issue and operate certain
payment systems, which will now be under the scrutiny of the Hong
Kong Monetary Authority.
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This article provides information and comments on legal
issues and developments of interest. The foregoing is not a
comprehensive treatment of the subject matter covered and is not
intended to provide legal advice. Readers should seek specific
legal advice before taking any action with respect to the matters
discussed herein. Please also read the JSM legal publications
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