Risk Management Requirements for Alipay Overseas Acquirers

The management requirements apply to Alipay overseas cooperative acquirers.

1.       Acquirers’ Obligations on Secondary Merchants Risk Management

1.1    Secondary Merchant Onboarding

a)    Merchant Requirements:

I.    Overseas Acquirers shall not onboard any merchants who sell prohibited products, including but not limited to any products related to pornography, gambling, illegal drugs, weapons, financial business and illegal political contents (for the full list of prohibited product, please refer to the Alipay Prohibited Product List attached hereunder as Annex I).

II.    Overseas Acquirers shall only onboard merchants with bona fide business purposes (the merchants shall not engage in any fraud or false trading, transaction laundering, disposal of stolen goods or any other illegal activities).

b)    Offline Merchant Pre-onboarding: in respect of any offline merchants onboarding, Overseas Acquirers shall provide the name and ID of the secondary merchants, the store name, Store ID, address and two photos of the retail stores (one for the front and the other for the interior of the retail stores) and MCC. Also, Overseas Acquirers shall submit the full information of merchants’ transactions (including the name and ID of secondary merchants, the store name, Store ID of the retail stores and MCC) to Alipay via the payment API as required, and the information so submitted shall be consistent with the pre-onboarding merchants’ information.

c)    Online Merchant Pre-onboarding: in respect of any online merchant onboarding, Overseas Acquirers shall provide the name and ID of the secondary merchants, the domain name of merchants’ website or the App download URL and website or App MCC. In addition, Overseas Acquirers shall also provide full information of merchants’ transactions (including the name and ID of the secondary merchant, the domain name of merchants’ website or App download URL and website or App MCC) to Alipay via the payment API as required, and the information so submitted shall be consistent with the pre-onboarding merchant information.

1.2    Secondary Merchants Risk Monitoring

a)    Prohibited Products: Overseas Acquirers are obliged to prevent secondary merchants from trading any prohibited products, including but not limited to any products related to pornography, gambling, illegal drugs, weapons, financial business and illegal political contents (for the full list of prohibited product, please refer to the Alipay Prohibited Product List attached hereunder as Annex I).

b)    False Trading: Overseas Acquirers are obliged to supervise any operations of secondary merchants and shall ensure that all transactions of merchants are conducted based on authentic trading background.

c)    Merchant Fraud: Overseas Acquirers are obliged to supervise secondary merchants to prevent merchant fraud. In the event that any unauthorized transactions, merchant fraud or any other violation of applicable rules notified to Alipay, the Overseas Acquirer shall cooperate with Alipay to mitigate relevant transaction risks by the following means (including but not limited to): withholding any payments or settlements, suspending/terminating cooperation with secondary merchants and making any indemnification.

d)    Transaction Laundering: Overseas Acquirers are obliged to monitor secondary merchants on transaction laundering, including but not limited to

  I.    Misuse of Alipay offline products in online scenarios;

  II.    Misuse of Alipay online products in offline scenarios;

  III.    Misuse of Alipay overseas offline products in Mainland China scenarios;

  IV.    Misuse of Alipay overseas products in any countries or regions where the Overseas Acquirer is not authorized to operate; and

  V.    Laundering transactions conducted by a secondary merchant through another merchant or another secondary merchant.

e)    Fund Settlement: Overseas Acquirers shall directly settle transaction amounts to secondary merchants (as opposed to settling transaction amounts to any other third-party acquirers or independent sales organizations, which in turn settle the amounts to merchants).

1.3    Secondary Merchant Non-compliance

Overseas Acquirer shall timely mitigate any risks identified in the process of merchants risk monitoring or as notified by Alipay and shall cooperate with Alipay to mitigate the relevant risks so identified.

a)    Merchant Investigation: Overseas Acquirer shall cooperate with Alipay in suspicious merchants investigations by way of procuring relevant transaction information, including but not limited to merchants’ information, business license, transaction evidence (e.g. invoices, receipts, proof of shipping, proof of delivery). Overseas Acquirer shall conduct the onsite visit to suspicious merchants as necessary or as per requests of Alipay.

b)    Suspending Merchant Accounts: acquirers shall suspend the accounts of suspicious or non-compliant merchants as necessary or as notified by Alipay.

c)    Termination: if a secondary merchant violates applicable and critical rules (as notified by Alipay or to the Overseas Acquirer’s sole discretion), the Overseas Acquirer shall terminate the service provided to the non-compliant merchant.

2.    Overseas Acquirers Risk Management

Overseas Acquirer may be subject to additional investigation and risk assessment under the following circumstances:

a)    Average amounts of acquiring in each month exceeding a threshold decided by Alipay;

b)    Any concerns about the Overseas Acquirer’s operating conditions raised by negative news, customer complaints or other indications

Overseas Acquirer will be notified by Alipay of the investigation in forms of inquiries, management interview or on-site review and are obliged to cooperate with Alipay in such investigations and deliver relevant documents as reasonably required.

Updated on August 27, 2018

Annex I: Alipay Prohibited Products List

As updated by Alipay from time to time.