China is one of the largest global fintech markets, with almost 90% of the population regularly using a fintech service. While domestic players like Alipay and WeChat have dominated the market, global fintech companies are increasingly offering services in China.
One key area of focus is cross-border e-commerce, as China’s burgeoning middle class - estimated to exceed 500M people by 2025 - is driving demand for international goods, which has eclipsed over $315B in recent years. For fintechs to participate in this market, they must comply with China’s unique Protection of Personal Information (PIPL) and Anti-Money Laundering (AML), which require customer verification for cross-border transactions.
China’s recently proposed Amended Anti-Money Laundering Law, which went into effect on 1 January 2025, also heavily emphasizes PIPL. This new version focuses more on data security, handling, and confidentiality and will extend into the non-financial sectors.
In addition, China has amended its language to extend to overseas money laundering, bringing into scope activity that takes place outside of China. This presents additional risk to fintech companies that want to provide access to services to Chinese consumers and businesses outside of the mainland.
This is a lot to handle. While many fintechs operate across jurisdictions, there are unique elements to China’s regulations that differ from rules in the US, UK, and EU regarding data protection and AML. Fintechs must carefully balance the opportunities of providing services within China and to Chinese citizens and businesses with the obligations and potential enforcement actions the Chinese government has proven to take.
While China has not yet fined a US or UK fintech directly, they have demonstrated a willingness to enforce regulations on companies like Tencent by fining them over $300M for breaches that included violating regulations on managing merchants, settlements, and payments. It should not be a surprise if a similar approach prevails for non-Chinese companies as time goes on.
Many more considerations are detailed in our new guide, “Navigating KYC and AML Challenges in China: A Comprehensive Guide to Identity Verification in 2025”, as we look to help the industry make the most of the opportunities in China, in line with regulatory obligations.