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How does the network association affect the third-party payment landscape?

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According to the latest news from last month: From June 30, 2018, third-party payment will completely stop the direct banking mode, and all online payment services will be processed through the network platform. What impact will the establishment of the network link have on the third-party payment structure?


Third-party payment market: the rise of competition and increased competition


According to the “Administrative Measures for Payment Services of Non-Financial Institutions” issued by the central bank in 2010, third-party payment refers to online payment (including Internet payment, mobile payment, fixed-line payment and digital) provided by non-financial institutions as payment agents for receiving and paying parties. TV payment), prepaid card, bank card receipt and other payment services determined by the People's Bank of China.


Bank card acquiring market: The support base of the bank card trading market is stable and the growth rate is slowing down.


According to the "Overall Situation of Payment System Operation in 2016", from the macro level of bank card transactions, in 2016, a total of 311,154 million bank card transactions occurred in the country, amounting to 741.81 trillion yuan, an increase of 35.49% and 10.75% respectively. The growth rate of transactions is faster than the growth of transaction amount, indicating that in the era of mobile Internet, the increase of bank card binding third-party payment platform has caused bank cards to extend from large-volume low-frequency consumption scenarios to small-frequency high-frequency scenarios, but overall Significant signs of a slowdown in the growth rate of bank card transactions.


From the micro level of bank card transactions. By the end of 2016, the national per capita bank card was 4.47, and the bank card penetration rate reached 48.47%, up 0.51 percentage points over the previous year. From the per capita card holding capacity and bank card penetration rate, the bank card issuance space is not large. . As shown in Figure 4, the amount of bank card spending was 9,593 yuan, down 5.08% year-on-year. The decline in per capita consumption also reflects to some extent the changes in mobile payment habits of residents.


Third-party bank card receipts accounted for half of the bank card acquiring market, which was affected by mobile payments and the business growth rate declined. According to the statistics of UnionPay Business, as shown in Figure 5, third-party bank card receipts accounted for 43% of the market share of the bank card acquiring market in the first half of 2016. As shown in Figure 6, although the growth rate of third-party acquiring business declined, the growth rate was higher than the bank acquiring business. Third-party acquiring orders are expected to play an increasingly important role in the bank card acquiring market with their innovative capabilities and convenient services.


Internet payment: Internet payment is developing rapidly, and mobile payment plays a leading role.


Online payment has developed rapidly. In 2016, the number of online payment users was 474 million, a year-on-year increase of 14.01%, while the number of mobile users reached 469 million, an increase of 31.17% over the same period of last year. The mobile payment usage rate has increased year by year in the past four years, reaching 64.90% in 2016. The network payment usage rate is quite similar, and it can be seen that mobile payment has become a network payment mode that people use more and more frequently.


The network payment oligopoly pattern is obvious. In the Q3 third-party mobile payment and Internet payment transaction scale statistics in 2016, Alipay and Tenpay are in the same position, as shown in Figure 7&8, the sum of Q4 Alipay and Fortune's market share in 2016. They rose to 92% and 63% respectively.


Mobile payment has replaced Internet payment as the leader in online payment. From the proportion of third-party network payment segmentation industry payment transaction scale, Internet payment has been squeezed from 96.5% in 2011, and only accounted for 25.4% in 2016. The trend of mobile payment compression Internet payment market share will not be short-term. changes happened.


What are the expectations of the network association: What are the concerns of the payment industry that regulators are concerned about?


In direct connection mode, there may be local regulatory loopholes in third party payments.


Before the emergence of the networked platform, China's third-party payment institutions mainly adopted the direct-linked banking model. As shown in FIG. 11, in the direct connection mode, the third-party payment institution is directly connected to the banking system and connected to the user, and the transaction data cannot be monitored. As mentioned earlier, Alipay and Fortune are leaders in the field of online payments. They have strong bargaining power and vigorously expand the scope of direct banks, which makes them have the advantage of other third-party payment institutions can not have. The non-bank payment institution undertakes the liquidation function in the actual operation, and forms a new tripartite model with the merchant and the fund custodian bank to complete the entire payment process.


From the perspective of regulators, there may be loopholes in funding supervision for third-party payment institutions directly connected to the bank. Third-party payment institutions use the direct connection mode to directly connect with banking financial institutions. In the direct connection mode, the payment institution can open an account in multiple banks, so that the funds flow within the same payment institution, and the payment institution only needs to adjust the amount of different bank accounts after the internal rollover, and complete all payment transactions. Process. In this process, the specific information of the payment transaction will only remain inside the payment institution, and the regulatory agency can only see the change of funds of the payment institution in each bank account, and can not effectively monitor the violations that may exist in the payment process. There may be risks of money laundering and taxation, and there are also some illegal accounts in these institutions. Once again, the original third-party agency issued a payment license, but after obtaining the license, the work of these institutions "banking insurance" is doing, it can be said that part of the role of the central bank is also exercised, plus the third-party payment business has Up to tens of billions of dollars, risk concerns naturally cause regulatory attention.


The establishment of the network was attempted to fill the regulatory loopholes and guide the three parties to pay the return to each other.


In this sense, the birth of the network association is not born out of the world. Putting it into the policy efforts of the central bank's standardized payment system in recent years, it should be said that it is natural. From the past two years, the central bank has introduced account classification, payment agency deposits, and a series of measures such as the recent transaction migration to the network platform. It is not difficult to see that the central bank's regulatory thinking is becoming clearer. The central bank is concerned with preventing financial risks and protecting the safety of the people. The establishment of the network association has enabled the central bank to have a technical means for the supervision of payment institutions, which means that the central bank has begun to pay from third-party payments, and regards Internet financial services and online consumer finance supervision as an important part of financial regulation creation. Through the unified platform access and clearing of payment institutions, it will help to improve payment efficiency, avoid redundant construction, and supervise third-party payment services more comprehensively, thereby comprehensively reducing risks and protecting the rights and interests of ordinary people. Gradually guide third-party payment back to the essence of Internet finance of “small convenience, universal benefit”, and guide the healthy and orderly development of third-party payment business.


The three-party payment model of the financial direct bank of the third-party payment institution previously excluded UnionPay from the transaction. The central bank and various banks are unable to grasp all the transaction information and capital flow in real time from a macro perspective, which brings great difficulties to the financial work of central banks such as anti-money laundering, financial supervision, monetary policy adjustment and financial data analysis. After the network is officially put into operation, it will change the passive situation in the supervision, and it is expected to break the current situation of “post-mortem tracing” and turn to a more active “disposal in time” or even “early warning”, online payment field. The efficiency of financial supervision will be qualitatively improved.


How does the network association affect the third-party payment structure?


As a clearing platform for online transactions, the network connects to the payment institution and connects to the banking system, similar to the online “UnionPay”. The main purpose of the establishment of the network by the central bank is to make all transaction data transparent, put the data under supervision, and provide protection for the protection of people's property. Its establishment has the following effects on the third-party payment pattern:


1. The rate is unified. In the long run, the direct advantage of the institutions that occupy the leading position in the market will disappear. For online payment, Alipay and Tenpay, which originally occupied the oligarchic position, will lose the rate advantage of the direct bank, and the cost will increase. The third-party online payment institution with weak bargaining power will enjoy the flat rate and lower the cost. However, it takes a certain amount of time to access the network and the unified rate. In the short term, the advantages of Alipay and Tenpay will still exist.


2. The reserve fund is uniformly regulated, and the third-party online payment institution may enter the accelerated reshuffle stage. After the unified supervision of the reserve funds, the hidden income of the third-party payment institutions will decline. In the long run, the rates will be unified, and the organization will not have to devote energy to the development of direct-linked banks and gradually return to pay for the industry. Third-party online payment institutions need to increase market share and improve service quality in order to cope with the pressure of actual revenue decline. Third-line payment institutions may face accelerated reshuffle.


3. For third-party bank card acquirers that basically adopt the “quartet mode”, the establishment of the network will not be directly affected by the current situation assessment.


4. From the current positioning set by the regulatory body, the network association only participates in liquidation and does not participate in payment, and does not constitute direct competition with third-party payment institutions.