Risk Management Requirements for Overseas Acquirers
These Risk Management Requirements apply to all Alipay overseas cooperative acquirers (“Overseas Acquirers”) having entered into an Alipay Service Contract with Alipay.com Co. Ltd (“Alipay”). This document sets out the Acquirer’s key responsibilities for managing risks associated with providing payment processing, authorization and settlement services to its Secondary Merchants and enabling its Secondary Merchants to accept Alipay Services indirectly through it.
All Overseas Acquirers must ensure that their business operations and its Secondary Merchants comply with these Risk Management Requirements.
Unless otherwise defined herein, capitalized terms used in this document have the meanings given to them in the Alipay Service Contract between the Overseas Acquirer and Alipay.
#1. Overseas Acquirer’s Key Responsibilities
1) Secondary Merchant Onboarding
Overseas Acquirers must conduct Due Diligence on all prospective Secondary Merchants prior to onboarding including but not limited to the following:
a) Secondary Merchant Requirements
i. Overseas Acquirers must not onboard any Merchants who sell Prohibited Products specified in Annex I.
ii. Overseas Acquirers must only onboard Merchants with bona fide business purposes.
b) Secondary Merchant Information
i. Overseas Acquirers must provide or procure that the relevant Secondary Merchant provide complete and accurate information in relation to that Merchant as requested by Alipay including but not limited to:
ii. Overseas Acquirers must submit full Secondary Merchant information to Alipay via the Payment API as required and ensure that Secondary Merchant information is true, accurate and complete.
2) Secondary Merchant Risk Monitoring
Overseas Acquirers must have adequate risk controls and systems in place to monitor each of its Secondary Merchants to ensure compliance with these Risk Management Requirements including but not limited to the following:
a) Prohibited Products: Overseas Acquirers must procure that its Secondary Merchants do not sell Prohibited Products through Alipay’s platform. The full list of Prohibited Products are annexed to the Alipay Service Contract and will be amended and notified to the Acquirer from time to time.
b) False Trading: Overseas Acquirers are obliged to monitor and supervise the operations of its Secondary Merchants and ensure that all Transactions submitted by Secondary Merchants are authentic transactions and conducted based on authentic trading background.
c) Unauthorized Payment and Fraud Prevention: Overseas Acquirers are obliged to monitor and supervise each of its Secondary Merchants to prevent unauthorized payments and fraud. In the event of unauthorized payments or fraudulent transactions, the Acquirer must cooperate with Alipay to mitigate relevant Transaction risks including but not limited to: i) adjusting payment limits; ii) withholding Payments or settlements; iii) suspending or terminating the provision of Alipay Services (in part or in whole) to its Merchants; and/or iv) indemnifying Alipay for any damages, losses and liabilities it may suffer as a result of Unauthorized Payments or fraudulent Transactions.
d) Product Misuse: Overseas Acquirers are obliged to monitor Secondary Merchants on an ongoing basis for potential product misuse, including but not limited to the following types of misuse:
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 Chinese Mainland;
iv. Misuse of Alipay overseas products in any countries or regions where the Acquirer is not authorized to operate; and
v. Transactions conducted by a Secondary Merchant through another Acquirer or a Secondary Merchant not authorized by Alipay.
e) Fund Settlement: Overseas Acquirers must directly settle Transaction amounts to Secondary Merchants and must not settle to any other third-party Overseas Acquirers or independent sales organizations.
f) Mandatory Transaction Information Reporting: Overseas Acquirers must provide, and procure each of its Secondary Merchants provide Mandatory Transaction Information for each Transaction submitted to Alipay as set forth in the Appendix of the Alipay Service Contract (as amended and notified to the Acquirer from time to time). The Acquirer must ensure that all Mandatory Transaction Information submitted in relation to its Secondary Merchant’s Transactions are true, accurate and complete.
3) Secondary Merchant Risk Investigation
Acquirer must, reasonably and in a timely manner, mitigate any risks identified in the process of Secondary Merchants Risk Monitoring or as notified by Alipay.
Overseas Acquirers must cooperate with Alipay in the event of suspicious Secondary Merchants and/or transaction investigations conducted by Alipay. Overseas Acquirers must provide, or procure that its Secondary Merchant provide relevant and necessary information including but not limited to Secondary Merchants’ information, business license, website/ or the App download URL (for online Secondary Merchants), two photos of the offline Secondary Merchant (front and the interior of the retail stores), and transaction evidence (e.g. invoices, receipts, proof of shipping, proof of delivery). Overseas Acquirers may conduct onsite visits when investigating suspicious Secondary as necessary or as per requests of Alipay.
4) Secondary Merchant Risk Non Compliance
If Alipay reasonable suspects that a Merchant is in violation of or in breach of these Risk Management Requirements and any provision of the Alipay Service Contract, Overseas Acquirers should cooperate with Alipay to conduct appropriate remediation actions, including but not limited to:
a) Suspension of Merchant Accounts: Overseas Acquirers shall suspend the accounts of suspicious or non-compliant merchants as necessary or as notified by Alipay.
b) Termination: If a Secondary Merchant violates applicable and critical rules and requirements (as notified by Alipay or as determined in the Overseas Acquirer’s sole discretion), the Overseas Acquirer shall terminate the service provided to the non-compliant merchant.
#2. Overseas Acquirers Risk Management
Alipay may be required to conduct additional investigation and risk assessments of the Overseas Acquirers if Alipay determines that it is necessary to take appropriate and reasonable risk measures in the following circumstances:
a) if the average monthly amounts of Acquirer exceeds a threshold determined by Alipay as necessary according to its risk assessments; or
b) if Alipay has concerns about the Acquirer’s operating conditions including concerns raised by negative news, customer feedback and User Complaints.
Overseas Acquirers will be notified of all investigations conducted by Alipay which may take the form of Transaction information requests, enquiries, management interviews and/or on-site visits. Overseas Acquirers must, and procure that its Secondary Merchant cooperate with Alipay to provide relevant information or documents reasonably requested by Alipay.
#3. Overseas Acquirers Non Compliance
If Alipay reasonable suspects that a number of Secondary Merchants or the Overseas Acquirer are in violation of, or in breach of these Risk Management Requirements and any provision of the Alipay Service Contract, Alipay may take one or more of the following remediation actions:
i. serving a Notice of Non-Compliance;
ii. issuing a warning notice setting out the consequences for non-compliance;
iii. suspending or restricting new Secondary Merchants onboarding by the Overseas Acquirer;
iv. adjusting Transaction limits;
v. suspending Alipay Services including but not limited to the suspension of Payments for that non-compliant Secondary Merchant(s); and/or
vi. terminating Alipay Services.
In the case of remediation actions against the Secondary Merchant(s), Overseas Acquirer must cooperate with Alipay and carry out such action as notified and requested by Alipay.
#Annex I: Lists of Prohibited and Restricted Products
Part A - Prohibited Products
Information of endangering national security, including promoting terrorist and extremist organizations, subversion of state power, and disseminating state secrets
Discriminatory or degrading information related to race, gender, religion, region, etc.
Pornographic and/or vulgar audio-visual products, pictures, channels, and publications
Pornographic and/or vulgar erotic services (including but not limited to sex chatting and prostitution)
Oral or external aphrodisiac products that can cause others to temporarily lose resistance and/or consciousness
Gambling devices and accessories
Narcotics and related accessories and paraphernalia
Anesthetic and psychotropic drugs
Weapons of all types (including but not limited to knives, firearms and accessories, replica weapons, ammunitions and explosives)
Military or police equipment
Poisonous or hazardous chemicals
Explosives and explosive devices
Flammable and explosive chemicals
Asbestos and products containing asbestos
Ozone depleting materials
Highly toxic pesticides
Fireworks and firecrackers
Medical toxic drugs, radiopharmaceuticals and special pharmaceutical products
Aphrodisiacs, diet pills and health products containing prohibited ingredients
Fetal gender determination products or services
Online sale of prescription medicine
Online sale of medical services, including medical consulting, hypnotherapy, plastic surgery
COVID-19 test kits
Online sale of tobacco including cigarettes
Online sale of electronic cigarettes, electronic cigarette liquids
Online sale of tobacco-making materials and machineries
Human organs and remains
Archaeological and cultural relics
Any trading in tax invoices issued within the Peoples Republic of China
Trading or distribution of currency (both RMB and foreign currencies, including crypto-currencies)
Antiques and artwork
Banking products and services (including any type of loans)
Insurance products and platforms
Stocks and securities
Illegal sale of financial information (e.g. bank accounts, bank cards)
Sale of acceptance terminals
Trading or sale of virtual currencies (e.g. Bitcoin, Litecoin)
Cashback from Alipay account
Illegal or unregistered fund-raising activities
Pyramid schemes and multi-level marketing
Rebate or cashback services
Foreign exchange services
Peer to peer (P2P) lending services
Multi-purpose stored value cards
Financial intermediary services
Software or products related to trading of financial products and investment information
Espionage equipment and accessories
Services or products that infringe personal privacy (e.g. online activity monitoring)
Malwares, Hacking services or accessories
Illegal tools (e.g. lock picking tools and accessories)
Descramblers and other items that can be used to gain unauthorized access to television programming (such as satellite and cable TV)
Mass distribution equipment, software and services
Illegal publication of certificates or carving of stamps
Services to facilitate plagiarism and examination fraud
Personal privacy information and corporate internal data
Debt collection services
Goods or services used to improperly obtain traffic or popularity
Real estate (including intermediaries)
Sale of animals, plants or products with contagious and hazardous diseases
Sale of animals, plants or products originating from areas declared with an epidemic outbreak of contagious diseases
Counterfeit or replica products
Cross-border marriage agency
Sale or distribution of event tickets without license (e.g. Olympic Games or World Expo tickets)
All religious websites, publication or accessories
Online cemeteries and ancestry worshipping
Immigration services (including intermediaries)
Auction sites and services
Other goods or services that violate relevant PRC laws and regulations or adversely affect the reputation of the Alibaba Group
Part B - Restricted Products
Prepaid cards (including gift cards and other stored value cards) and top-ups
Medical beauty service (offline)
Luxury goods (such as jewelry and precious gems and/or metals)
Charitable Organization products and/or donations
Car sales (including used cars)
Prepayment or deposits
Sale of furniture
Feng Shui or fortune telling or tarot divination services
The lists may be updated by Alipay from time to time.
Updated on Augest 27th, 2020