Strict regulation continues! 14 payment institutions fined and confiscated 86 million yuan, with dual penalties reinforcing compliance responsibilities

How does the double penalty system specifically promote payment institutions to fulfill compliance responsibilities?

21st Century Business Herald Reporter Bing Wanli

Since the beginning of 2026, the payment industry has continued its trend of strict regulation.

According to incomplete statistics from 21st Century Business Herald, so far, 14 payment institutions have been legally penalized for violations such as non-compliance with payment clearing management regulations and irregular transaction information, with total fines and confiscations reaching 86.7413 million yuan.

Among them, KaiLianTong Payment Services Co., Ltd. was fined over 38 million yuan, setting a new record for the highest single penalty for a payment institution this year; the relevant person in charge of KaiLianTong Payment was held responsible for some illegal activities and fined 224,500 yuan. Notably, among the 14 penalized institutions, 8 have their responsible persons simultaneously penalized.

Borton Consulting Chief Analyst Wang Pengbo told 21st Century Business Herald that the high-pressure regulatory stance at the start of 2026 is not accidental. Based on our observations, after the implementation of the “Regulations on the Supervision and Administration of Non-Banking Payment Institutions,” regulatory authorities are promoting industry compliance through normalized, high-intensity law enforcement inspections. This shifts the industry from rapid expansion to compliant operation, emphasizing the importance of institutional responsibility, and providing clear signals for preventing capital risks and information security issues, as well as maintaining market order. Naturally, the overall compliance pressure on the industry will increase.

In terms of enforcement intensity, the total fines and confiscations for these 14 institutions amount to 86.7413 million yuan. KaiLianTong Payment leads with a fine of 38.4349 million yuan, accounting for 44.3% of the total penalties. Su Xiaorui, senior researcher at Suxi Zhiyan, stated that from last year’s penalty trends, the number and amount of fines in the payment industry have significantly increased compared to previous years. On the last day of 2025, multiple payment institutions received regulatory fines simultaneously, indicating that regulatory enforcement was significantly strengthened in 2025.

It is understood that KaiLianTong Payment was established in 2010 with a registered capital of 100 million yuan. It is one of the first 27 non-bank payment institutions in China to obtain a “Payment Business License” issued by the People’s Bank of China. Its main businesses include prepaid card issuance and acceptance (nationwide), internet payments, cross-border payments, and customized enterprise payment solutions.

The penalty notice shows that KaiLianTong Payment was fined and confiscated 25.5572 million yuan for seven violations, including “failure to ensure transaction information is true, complete, and traceable,” “failure to strictly implement risk monitoring requirements,” and “illegal T+0 transaction settlement.” The total penalty and confiscation amounted to 38.4349 million yuan. Additionally, the relevant responsible persons of KaiLianTong Payment were directly responsible for some illegal activities and fined 224,500 yuan.

Apart from KaiLianTong Payment, Yinsheng Payment also received fines exceeding 10 million yuan. Due to violations such as merchant management, clearing management, and account management, Yinsheng Payment was warned and criticized by the Shenzhen branch of the People’s Bank of China, with total fines and confiscations of 15.8417 million yuan. The then-chairman of Yinsheng Payment was also held responsible for the violations and received a warning and a fine of 61,000 yuan.

It is worth noting that among the 14 payment institutions, 10 received fines exceeding one million yuan. Besides the two mentioned above, others include Kunpeng Payment, Xingyi Payment, Beijing Hengxintong Telecom Services Co., Ltd., Chongqing Yiji Pay Technology, Huifu Payment, Sui Xing Pay, Beijing Sina Payment, and Kuai Fu Tong Payment, with fines and confiscations of 9.1435 million yuan, 8.4719 million yuan, 6.978 million yuan, 5.7733 million yuan, 2.9772 million yuan, 2.7333 million yuan, 1.8447 million yuan, and 1.2711 million yuan respectively.

Regionally, Beijing, as the hub of payment institutions, has four institutions fined: KaiLianTong Payment, Beijing Sina Payment, Beijing Hengxintong Telecom, and Sui Xing Pay, with total fines and confiscations reaching 50.0944 million yuan, accounting for 57.8% of the national total. Shenzhen and Shanghai, as cities active in financial innovation, also have institutions on the list, including Yinsheng Payment, Shenzhen Kuai Fu Tong Payment, and Shanghai Huifu Payment. Provinces like Fujian, Zhejiang, Jiangsu, and Shandong also have institutions penalized.

Su Xiaorui stated that the strict regulatory stance since the start of 2026 has not eased. At the beginning of the year, the People’s Bank of China held the 2026 Payment Settlement Work Conference, emphasizing strict implementation of penetrating supervision and payment business function regulation. The fines issued at the start of 2026, including large fines, demonstrate that “penetrating supervision” is being effectively implemented, capable of seeing through superficial business activities to target underlying violations. The occurrence of fines exceeding millions of yuan also highlights that compliance is a serious matter; payment institutions must learn from industry lessons and avoid complacency.

Another highlight of this enforcement is the comprehensive application of the “double penalty mechanism.” Among the 14 penalized institutions, 8 institutions’ 11 responsible persons were simultaneously held accountable, with individual penalties ranging from 100,000 to 224,500 yuan. Penalties included warnings and fines, effectively reinforcing both institutional and personal compliance responsibilities.

Wang Pengbo believes that holding responsible persons accountable alongside institutions reflects the strengthening of penetrating management by regulators. Previously, some institutions prioritized business over compliance, with responsibilities often unclear and reforms superficial. The double penalty system directly transfers compliance responsibilities to management and responsible personnel, forcing decision-makers and implementers to focus on internal controls and risk management, reducing complacency and illegal impulses, and enhancing the effectiveness and deterrence of regulatory sanctions.

Regarding the targets of penalties, the individuals mainly responsible are concentrated in three key roles: first, management, such as the former chairman of Yinsheng Payment, who was penalized for the company’s illegal activities; second, risk control and compliance positions, including Chen Xia from Beijing Sina Payment’s risk management department and Liu Molong from Sui Xing Pay’s risk control office, who were fined for direct responsibility; third, business management roles, such as Qie, deputy general manager of the Financial Market Department at Chongqing Kunpeng Payment, who was warned and fined 50,000 yuan for expanding outsourced agencies into contracted merchants and receiving their bank card transaction information.

The “Regulations on the Supervision and Administration of Non-Banking Payment Institutions” clearly stipulate that, when penalizing non-banking payment institutions, authorities may simultaneously warn or criticize directly responsible directors, supervisors, senior managers, and other personnel, with fines ranging from 50,000 to 500,000 yuan, and may prohibit or ban them from serving as directors, supervisors, or senior managers of non-banking payment institutions for a certain period or permanently if violations are severe.

Su Xiaorui stated that the normalization of the “double penalty system” and the simultaneous penalties for responsible persons serve as a warning to other practitioners in the payment industry.

It is noteworthy that, through reviewing the administrative penalty decisions of these 14 institutions, the main violations involve irregular transaction information, inadequate risk monitoring mechanisms, and non-compliant merchant management, reflecting weak links in current payment industry compliance management.

The most prominent issue is the irregular management of transaction information, which appears most frequently in the reasons for penalties among the 14 institutions. Specifically, “failure to ensure transaction information is true, complete, and traceable” was cited in three cases, including KaiLianTong Payment, Sui Xing Pay, and Huanxin Tong Telecom Services. Inadequate risk control mechanisms are another major violation area, with two institutions fined for “not strictly implementing risk monitoring requirements,” two for “not setting transaction limits for barcode business as required,” and two for “conducting business beyond permitted scope.” Additionally, some institutions were penalized for non-compliant merchant management.

In response to these common violations, Su Xiaorui pointed out that anti-money laundering and merchant management remain major violation areas for payment institutions, indicating that “full-chain” penetrating supervision has become the norm in the industry, and that the industry is undergoing accelerated reshuffling.

Wang Pengbo told 21st Century Business Herald that, from the content of the penalties and the regulatory logic, this round of penalties mainly targets core areas such as transaction authenticity, risk monitoring, and merchant management. These are high-risk areas for payment activities and key channels for illegal activities like money laundering, cash-out, and telecom network fraud. The strict enforcement aims to close loopholes in capital flow, strengthen the risk prevention obligations of payment institutions, and ensure that the entire process—from merchant access, transaction verification, to abnormal monitoring—is controllable, safeguarding the stable operation of the payment system.