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:

Offline Secondary Merchants

Online Secondary Merchants

·         business name (registered and ‘trading as’ name)

·         registration number

·         Secondary Merchant type

·         country of incorporation

·         registered address

·         store name

·         store ID

·         store country

·         store address

·         two photos of the retail stores (front and interior of retail stores)

·         MCC

·         any other relevant Secondary Merchant information as reasonably requested by Alipay from time to time

·         business name (registered and ‘trading as’ name)

·         registration number

·         Secondary Merchant type

·         country of incorporation

·         registered address

·         domain name of Secondary Merchants’ website (or the App download URL of online sites) 

·         MCC

·         any other relevant Secondary Merchant information as reasonably requested by Alipay from time to time

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

1.

Information endangering national security, including promoting terrorist and extremist organizations,
subversion of state power, and disseminating state secrets

2.

Discriminatory or degrading information related to race, gender, religion, region, etc.

3.

Pornographic and/or vulgar audio visual products, pictures, channels, and publications

4.

Pornographic and/or vulgar erotic services (including but not limited to sex chatting and prostitution)

5.

Oral or external aphrodisiac products that can cause others to temporarily lose
resistance and/or consciousness

6.

Gambling

7.

Lottery

8.

Gambling devices and accessories

9.

Narcotics and related accessories and paraphernalia

10.

Anaesthetic and psychotropic drugs

11.

Weapons of all types (including but not limited to knives, firearms, firearm parts and accessories, replica weapons, ammunition and explosives)

12.

Military, defence or police equipment

13.

Poisonous or hazardous chemicals

14.

Explosives and explosive devices

15.

Flammable and explosive chemicals

16.

Radioactive materials

17.

Asbestos and products containing asbestos

18.

Ozone depleting materials

19.

Highly toxic pesticides

20.

Fireworks and firecrackers

21.

Medical toxic drugs, radiopharmaceuticals and special pharmaceutical products

22.

Aphrodisiacs, diet pills and health products containing prohibited ingredients

23.

Fetal gender determination products or services

24.

Surrogacy services

25.

Online sale of prescription medicines

26.

Online sale of medical services, including vaccination, medical consulting, hypnotherapy, plastic surgery, nutriology, massage

27.

COVID-19 test kits

28.

Online sale of tobacco including cigarettes

29.

Online sale of electronic cigarettes, electronic cigarette liquids

30.

Online sale of tobacco-making material and machineries

31.

Human organs, body parts and remains

32.

Protected species

33.

Seeds

34.

Archaeological and cultural heritage relics

35.

Trading in tax invoices issued within the PRC

36.

Counterfeit currency

37.

Trading or distribution of currency (both RMB and foreign currencies including
crypto-currencies)

38.

Antiques and artwork

39.

Banking products and services (including all types of loans)

40.

Insurance products and platforms

41.

Stocks and securities

42.

Mutual Funds

43.

Pawn services

44.

Illegal sale of financial information (e.g. bank accounts, bank cards)

45.

Sale of payment acceptance terminals

46.

Trading or sale of virtual currencies (e.g. Bitcoin, Litecoin)

47.

Cashback from Alipay account

48.

Illegal or unregistered fund-raising activities

49.

Pyramid schemes and multi-level marketing

50.

Rebate or cashback services

51.

Foreign exchange services

52.

Gold investment

53.

Peer to peer (P2P) lending services

54.

Crowd funding

55.

Multi-purpose stored value cards

56.

Other financial products and intermediary services (e.g. guarantee and trust services)

57.

Software or products related to trading of financial products and investment information

58.

Espionage equipment and accessories

59.

Services or products that infringe personal privacy (e.g. online activity monitoring)

60.

Malwares, hacking services or accessories

61.

Illegal tools (e.g. lock picking tools and accessories)

62.

Descramblers and other items that can be used to gain unauthorized access to television programming
(such as satellite and cable TV)

63.

VPN service

64.

Mass distribution equipment, software and services

65.

Illegal publication of certificates or carving of stamps

66.

Services to facilitate plagiarism and examination fraud

67.

Personal privacy information and corporate internal data

68.

Debt collection services

69.

Goods or services used to improperly obtain traffic or popularity

70.

Real estate (including intermediaries)

71.

Crude oil

72.

Sale of animals, plants or products with contagious and hazardous diseases

73.

Sale of animals, plants or products originating from areas declared with an epidemic outbreak of contagious diseases

74.

Smuggled goods

75.

Counterfeit or replica products

76.

Lucky draws

77.

Cross-border marriage agency

78.

Sale, resale or distribution of event tickets without license (e.g. Olympic Games or World Expo tickets)

79.

All religious websites, publications or accessories

80.

Online cemeteries and ancestry worshipping

81.

Immigration services (including agents and intermediaries)

82.

Auction sites and services

83.

Superstition services (e.g. Feng Shui, fortune-telling or tarot divination services)

84.

Sale of brand new or second hand cars, ships and aircrafts (excluding accessories)

85.

Webcast and live streaming services (being activities that release real-time information to the public in the form of
video, audio, graphics and words via internet (excluding sale of goods via
webcasting on e-commerce platforms))

86.

Charitable donations, free gifts and aid funds (excluding transactions with consideration)

87.

Other goods or services that violate relevant PRC laws and regulations or adversely affect the reputation of the Ant Group

Part B - Restricted Products

1.

Prepaid cards and top-ups (including gift cards and other stored value cards)

2.

Online Gaming

3.

Medical beauty services (offline)

4.

Property leasing

The lists may be updated by Alipay from time to time.

Updated on May 10th, 2021