China’s central bank has outlined its definitions of monopoly among third-party online payments for the first time, as it moves ahead with a plan to curb the market concentration in the world’s largest fintech market. Any nonbank service provider with half of the market for online transactions, or two entities with a combined two-thirds share, could be subject to antitrust investigations, according to draft rules released on Wednesday by the People’s Bank of China . Three providers with three-quarters of the market would also set off the antitrust alarm. A nonbank service provider with less than 10 per cent market share that operates in a business with two or three dominant players shall be excluded from antitrust probes by regulators, the central bank said. The proposed rules, which are open to public feedback until February 19, are the most detailed yet of the financial regulator’s plan to curtail market concentration in China’s US$29 trillion e-payment market. With 1 billion active users between them, Ant Group’s AliPay and Tencent ’s WeChat Pay are ubiquitous in China, used everyday for everything from catching taxis to shopping, paying utility bills and investments. “The new draft rule is part of the tightening [financial] regulations. Payment is a fundamental part of financial services because it is where [fintech] companies start to enter the market,” said John Dong, a securities lawyer at Joint-Win Partners in Shanghai. “It is impossible for payment services to escape from [this regulatory environment]. There are no giants or businesses that cannot be carved up, and no company can be a monopoly forever.” The draft by the central bank, which oversees all banking and financial services, is part of the Chinese government’s efforts to rein in the unchecked growth of nonbank service providers in the payments market. Still, the central bank did not define how it would measure the market share for nonbank third-party payments. AliPay, provided by the affiliate of this newspaper’s owner Alibaba Group Holding , had 55.4 per cent of China’s market for mobile payments - one of many types of nonbank third-party payments - through smartphones as of June 2020, while WeChat Pay had 38.5 per cent, according to data by Analysys. The central bank can flag any monopolistic or anticompetitive behaviour that breaches the principles of “security, efficiency, credibility or fairness” to antitrust regulators for rectification. These actions may include the suspensions of service, veto of merger plans that produce monopolies, or “carving up nonbank payment institutions upon business types”, according to the draft regulation. The new regulations are drafted with other regulators to “further regulate the operation of payment institutions and maintain the healthy development of payment services market” through encouraging “openness and competition”, the People’s Bank of China said. The rules are also created to prevent “regulatory arbitrage and omissions”, the central bank said. That is a common criticism among China’s banks, which charge that fintech companies that provide financial services are not being regulated as banks - such as putting up capital that is commensurate with their lending - but get away with being technology companies . Antitrust regulators can be called upon to warn potential “monopolisers” of their breaches if the central bank finds one nonbank institution with more than a third of the payment service market, two institutions with over half of the market, or three institutions with 60 per cent of the share, according to the rules. The draft regulation also empowers the central bank to conduct on-site inspections to payment service institutions. With additional reporting by Zhou Xin