The People's Bank of China (PBOC) plans for further antitrust policies to curb non-bank payment practices in the country amid an ongoing government clampdown on technology giants in the consumer lending space.

The central bank issued an initial draft regulation Wednesday including its definition of monopoly as it applies to third-party online payments. The public can give feedback regarding the proposed rules until Feb. 19. Non-bank payments are handled by apps and other third parties outside of the regulated banking system.

Among non-bank payment service providers, once a single player has occupied one-third of the total non-bank payments industry or when two players combined have two-thirds of the market share, it will set off the antitrust alarm and the central bank will "hold talks" with these companies, the PBOC said. 

If three players hold a combined three-fifths market share it will also be subject to these regulations. The state council's antitrust committee will associate with the PBOC to deliver the execution, according to the draft regulation. 

Not only are the red lines set for defining the limits of market monopoly, the regulations set forth guidelines for scrutiny of market monopoly practices.

In terms of nationwide electronic transactions, the rules stated, if a single player of non-bank payment provider holds half of the market share, or two players with a combined two-thirds market share, they will face review by the antitrust committee. It will then further determine if these companies have market monopoly positions. 

The rules "filled the blankness" in regulating the non-bank payment industry, said industry analysts, it will bring an "industry shuffle" as many institutions will have to comply with new regulations for extending non-bank payment licenses.

The central bank first released measures to regulate non-financial institutions' payment business in June 2010. It defined non-financial institutions for the first time and required that these institutions gain payment business licenses under the PBOC's approval. 

"Endless innovations as well as complex, changeable risks have constantly emerged" over recent years along with the rapid development in payment industry. The new regulations aim to meet the supervision needs, said the central bank in a statement. 

Mobile payments have eclipsed traditional payment approaches domestically. Although there are 223 existent licensed payment service providers nationwide, online transactions are dominated by Alipay and WeChat Pay, iResearch data showed.

As of last June, Alipay had 55.4% of the mobile payments market share in China, while WeChat Pay had 38.5% of the market share, according to information provider Analysys.

The rules also highlighted that if payment practices "severely hinder the healthy development of the payment service market, the central bank can advise the antitrust committee to divide non-bank payment companies based on business types."

According to a Reuters report last July, the central bank urged the antitrust committee to launch an investigation into Alipay and WeChat Pay, alleging that the two companies have used their dominant positions to quash competition.

Beijing last November suspended Ant Group's $37 billion initial public offering and said the action was "necessary, reasonable and legal". Following that dramatic blow, the government launched an antitrust investigation into Ant's parent company Alibaba Group. 

Business Times reported on Dec. 22 that Ant Group voluntarily removed several finance products offering high returns and low thresholds from its Alipay platform. Another nine leading domestic Internet platforms, including Didi Finance, Baidu-backed Du Xiaoman Finance, JD Finance, Ctrip Finance, Meituan and Tencent Wealth Management, followed the same measures.

Just one day prior to PBOC's proposed regulation, ByteDance had launched a third-party payment service, Douyin Pay, on the Chinese version of TikTok. It enables users to buy virtual gifts on the nation's largest video-sharing platform, which sees as many as 600 million users per day.