If you’ve read the NihaoPay FAQs, then you already know that the biggest requirement for using NihaoPay’s payment services is having a registered business. The reality is that the business registration requirement originates from the Chinese payment platforms themselves since they operate under the Chinese government.
It can be confusing that a formal business registration is required when US citizens can automatically be considered sole proprietorships without any formal business registration at all. This article explains why NihaoPay and the Chinese payment platforms require a formal business registration.
If you’re unfamiliar with sole proprietorships, be sure to check out the article: Most Basic US Business Structure: Sole Proprietorship
Why Do the Chinese Payment Platforms Have a Business Registration Requirement?
China has strict business regulations. According to FDI China, ”A business license in China is an official license that all entities (including Chinese-owned companies) operating in China, are required to have.” Therefore, anyone who wishes to operate as an independent business in China must register their business.
WeChat Pay, AliPay, and Union Pay all operate under the Chinese government. Because of this, they follow the expectation that anyone wanting to use their services to process business payments must have a formal business registration. They extend this expectation to the rest of the world for international payments. This makes sense as they would want to eliminate scams and protect the customers who trust and rely on their services.
The Chinese payment platforms must follow China’s requirements for processing business transactions. Even sole proprietors must provide some sort of business registration certificate in order to use NihaoPay to process business transactions. If you want to be able to accept Chinese payments, you must be willing to play by China’s rules.
…But Stripe Doesn’t Require a Business Registration.
Stripe does not require a business registration when creating an account with them. US citizens don’t need a business registration to be considered a sole proprietor. So a formal business registration is not necessary for processing regular credit card transactions.
Some online teachers have been able to activate WeChat Pay on their Stripe account without having a formal business registration. However, it’s not uncommon for Stripe to send an email later with the same requirements. Stripe even specifies that this information is being required by WeChat Pay, as you can see in the image below.
Security With NihaoPay
You can feel secure when choosing to use NihaoPay to process payment from China. They always ensure that their merchant applicants meet all of the necessary requirements before approval. You never have to worry that NihaoPay will lock up your account sometime in the future due to needing additional information. They preform their due diligence up front, during the application process. They also work to resolve any problems or questions during the application process via email.
Conclusion
The Chinese government has strict requirements for recognizing what constitutes a formal business. Therefore, the Chinese payment platforms have a formal business registration requirement.
If anyone is wanting to accept business transactions from WeChat Pay, AliPay, or UnionPay, they will need to meet China’s formal business registration requirement. This is true regardless of which third-party processor they choose to use.
Registering a Business Seems Difficult, Expensive, and Overwhelming
It doesn’t have to be! Did you know that registering a business in the US can be fast, easy, cheap, or even free? Check out the articles below for more info about some simple business registration options. The registration certificates below can satisfy the Chinese business registration requirement. They also allow you to maintain a sole proprietorship status if you so choose.
- USA
- Canada
Disclaimer – Any information contained in this communication, including attachments and enclosures, is not intended as a thorough, in-depth analysis of specific issues. In addition, this article is not a substitute for a formal opinion; it is for informational purposes only. For more detailed information, readers may contact their local SBA office.
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