WeChat Pay Hit with HK$875,000 Fine by HKMA for Due Diligence Lapses Over Five-Year Period

Tencent's WeChat Pay Hong Kong was penalized with an HK$875,000 fine by the HKMA due to shortcomings in due diligence. The HKMA's probe spanned five years, ending in October 2021, during which WeChat Pay did not put sufficient safeguards and protocols in place.

The Hong Kong Monetary Authority (HKMA) announced on Friday that it has levied a penalty of HK$875,000 (US$112,205) on Tencent Holdings' local branch, WeChat Pay Hong Kong. The fine was imposed due to the company's failure to adequately carry out customer due diligence processes.

The Hong Kong Monetary Authority (HKMA) enforced disciplinary measures on WeChat Pay after conducting a probe which spanned over five years, from August 2016 to October 2021. The inquiry revealed that the service provider did not establish sufficient and suitable protocols pertaining to customer due diligence during this timeframe.

According to a statement from the HKMA, the shortcomings focused on protocols related to preventing money laundering and combatting terrorist financing via stored value facilities.

The Hong Kong Monetary Authority (HKMA) announced that WeChat Pay failed to evaluate the potential risks after receiving alerts from law enforcement to investigate mobile numbers associated with possible scams and verify if these numbers were connected to its clientele.

The firm received data on 1,827 instances relating to 500 accounts. Out of these, 98 were linked to 84 clients who were later reported to the Joint Financial Intelligence Unit (JFIU) of the Hong Kong government.