What Is Paperless Direct Debit?

Internet payment refers to the behavior of customers to purchase specific goods or services through computers and other devices to initiate payment instructions based on the Internet to realize the transfer of monetary funds. ^[1]

Internet payment

Internet payment refers to the behavior of customers to purchase specific goods or services through computers and other devices to initiate payment instructions based on the Internet to transfer money. ^[1]

In 2010, the Central Bank issued

The emergence of Internet TV payment makes people look bright, and TV has become a new payment terminal. It is just that the current Internet TV payment uses a dedicated network instead of the open Internet. Although the security is better, future development will be limited. At the same time as the new development of Internet payments, the security of Internet payments has become a topic of concern again. Adopting technical means to improve the security of the payment system and strengthen the government's supervision of Internet payments have become urgent tasks to protect the interests of users and maintain financial security.

After the leap-forward development in 2012, China's third-party payment industry has gradually formed a convergence situation where multiple offline and online payment methods coexist. With the deepening of third-party payment companies represented by Quick Money and Lok Fu, the offline POS acquisition business has gradually formed a three-dimensional, multi-dimensional, value-added offline online payment form. This is also an important development direction of the third-party payment industry in the future, not only covering investment and wealth management payment services, but also gradually expanding the business scope to meet the needs of B2B enterprises' liquidity management. ^[2]

Internet financial supervision now extends its tentacles to third-party payment services, the main reason of which is determined based on the main characteristics of China's Internet financial development. At present, China's Internet financial entities include two parts: one is the traditional financial institutions' access to the Internet, also known as the financial Internet; the other is the integration of Internet platforms and finance, which is close to Internet finance in a pure sense, mainly by third-party payment institutions The platform is the representative, engaged in the business of Internet payment and consignment of financial products.

Looking at the current third-party payment market, aside from innovation, only in terms of the implementation of risk control and safety protection models and technical specifications, Lok Fu has clearly taken the lead. Since its establishment in 2011, Lok Fu Pay has worked hard on the construction of risk control systems and the implementation of safety technologies. At present, bank-level risk control and security capabilities have been fully realized. On the risk control system side, by integrating the full platform resources of PBOC, UnionPay, and commercial banks, and taking national policies as the criterion, the full-scale chain implements fund supervision and transaction monitoring. Based on the four core links of "risk prevention, risk monitoring, risk investigation, and risk treatment", from the qualification examination of network access, to the implementation of monitoring transaction data by the risk system, investigating risk cases, and adopting risk control measures until the risk cases are reported to the supervisory authority and The public security department has established a one-stop risk prevention and protection system for the entire process. At the same time, in terms of security, with the three core modules of "network security measures, transaction authorization security measures, and subsequent remediation", it is possible to achieve Aegis-class funds security guarantee matrix. First of all, network security covers multi-layered protection encryption settings such as firewall, MD5 digital signature, PCI security certification, SSL certificate encryption, and password security control. Secondly, in the transaction authorization security measures, multi-level authorization identification tools such as security center, security toolbar, digital certificate, Lok Shield, and mobile phone password are integrated. Finally, in the follow-up remediation, a series of additional processing methods such as case tracking, case contrast, blacklist, data analysis, and RMCS rule adjustment are integrated. Industry veterans believe that Loft Payment's entire security system is complete in layers, with comprehensive application environment and scenario coverage, and will gradually become the security coordinate of China's third-party payment industry.

Channels and environment China has entered the era of Internet payments. In the face of the explosive growth of China's e-commerce industry, the real-world demands of modern enterprises and the increasingly extensive Internet payment of cardholders, and the government's urgent desire to build an electronic service platform, China UnionPay, as a Chinese bank card organization, actively Unite relevant parties in the industry to build a more secure, convenient and efficient online payment channel and environment.

Mobile phone secure payment On October 19, 2010, Alipay, a leading domestic third-party payment company, announced the establishment of a "Secure Payment Industry Alliance" with more than 60 manufacturers such as mobile phone chip vendors, system solution providers, mobile phone hardware vendors, and mobile phone application vendors. Establish an industry chain-level benefit sharing mechanism through Alipay. At the same time, Alipay released a new generation of wireless payment products in the industry-"mobile phone secure payment" for mobile Internet, providing an open and invisible platform for mobile application developers. This is the first domestic alliance in the field of wireless payment, marking the completion of Alipay's vertical and horizontal layout in the field of wireless payment, meanwhile, it means that Alipay's mobile Internet payment open strategy is officially launched.

The mobile payment product solution released by Alipay this time solves the payment difficulties in the current mobile environment. As long as the mobile phone user installs the application software with the Alipay interface, he can complete all the payment operations of the application software through the Alipay account; for developers, by quickly signing up with Alipay online and adding an Alipay interface to the software, use Payment schemes such as instant payment and large payment, and developers can get more than 90% of the entire industry chain's revenue, which is far higher than the 70% of internationally accepted practices.

"If the client is just the horizontal layout of Alipay in the wireless payment field, then this secure payment product will allow Alipay to further vertically penetrate the mobile Internet. Through open support for application software, it will open up the interests of the mobile Internet industry and complete the vertical and horizontal directions. The in-depth layout. "Industry analysts said.

Preparation period (~ 1992) Before the Internet entered large-scale commercial use, the electronic payment system had been sufficiently developed and laid the foundation for the subsequent development of the Internet payment system. The end of this phase was in 1992, marked by the widely accepted WWW and the number of global IP servers exceeding 1 million.

The role of the central bankThe People's Bank of China has three major functions as a central bank:

The role of Internet payment central banks

Develop and implement monetary policy

Implementing financial supervision

Provide payment and settlement services

The People's Bank of China operates three inter-bank payment systems, including more than 2,000 intra-city clearing houses, the national manual interbank system, and the national electronic interbank system. Services provided include:

Payment processing services: settlement of large-value and retail payment transactions for banks;

Provide settlement accounts: Branches at all levels of the People's Bank provide settlement account services for branches of commercial banks at various levels and other institutions (such as the Postal Savings and Remittance Bureau);

Providing credit services: Banks can borrow and borrow funds from branches of the People's Bank of China.

China's payment system China's payment system and its evolution are affected by many factors such as environment, culture, economic conditions, infrastructure, etc. The determinants come from the structure of the bank and the structure of the central bank account:

Internet Payment China Payment System

Bank structure: Although there are not many Chinese banking institutions, each state-owned commercial bank has a large number of branches and operates according to geographical scope and regulations. Each branch can be viewed as a separate entity, which results in different standards and business processes within a banking institution. Each branch office acts as an independent payment business processing unit to open an independent account in the local branch of the central bank, thus forming a complex and divided payment environment.

Central bank account structure: Large state-owned commercial banks and the central bank have a similar multi-level structure, including the head office and a number of provincial / autonomous regions / municipalities directly under the central government, city / regional central branches, and a large number of county-level branches. Each level of commercial bank opens an account at the corresponding central bank branch.

Affected by multi-level management and highly decentralized central bank account structure, China's payment system can be divided into 6 systems:

National Manual Interbank System (Central Bank)

National Electronic Banking System (Central Bank)

City Clearing House (Central Bank)

National Electronic Funds Exchange System (Big Four State-owned Commercial Banks)

Bank Card System (Bank Card Center)

Postal Remittance System (Postal Remittance Office)

1.National Electronic Banking System

The National Electronic Interbank System (EIS) is owned and operated by the People s Bank of China. It uses VSAT satellite communication technology and is a decentralized processing system. More than 2,000 branches / sub-branches of the People s Bank of China have joined the National Headquarters. Commercial bank branch / branch. Supports various payment types, but only handles credit transfers. All fund transfer instructions must be executed when the account balance is sufficient to pay, and the payment system has no credit or liquidity risks.

2.National Manual Banking System

The People's Bank of China and the four major state-owned commercial banks each have their own national paper-based non-local funds transfer systems. After 1996, the four major state-owned commercial banks replaced the manual bank with the national electronic funds exchange system, but the PBOC still runs its own manual bank system to handle inter-bank paper voucher off-site payment transactions and fund transfers between branches / sub-branches of the People's Bank of China. .

The commercial bank's system supports credit and debit payments; the PBOC's system handles fund transfers between branches / sub-branches of the PBOC, the transfer and transfer of state treasury funds, and the transfer of large amounts of funds in commercial banks. The manual system is divided into three levels of national, provincial and county jurisdictions, and direct payment tools are exchanged by wire transfer or letter transfer.

3. City Clearing House

2,000 intra-city clearing houses (LCHs, Local Clearing Houses) are distributed in central cities and counties / towns. All intra-city inter-bank payment transactions and most intra-city inter-bank payment transactions are conducted through inter-bank clearing between commercial banks in the same city's clearing houses, and then conducted within the intra-bank system. Offsite processing. Participants include most of the bank branches in their jurisdictions. Credit and debit payments are supported. Cheques are the main application and are only allowed in the same city.

4. Electronic funds exchange system

Since 1996, the four major state-owned commercial banks have established electronic electronic bank clearing systems (Electronic Intrabank Clearing Systems) to replace the original manual banks, which have similar multi-level tree structures, and most of them adopt net batch processing.

The above-mentioned systems are all cross-branch systems, not real inter-bank systems and in-house systems. An important feature is that for the payment of paper vouchers in different places, cross-bank settlement is first performed between commercial banks within the same city, and then the in-house clearing is performed by the commercial banks, that is, "first horizontal" (inter-bank) "post-straight" (in-line) processing the way.

China Modern Payment System The China Modern Payment System (CNAPS, China's National Advanced Payment System) project hosted by the People's Bank of China since the 1990s is a modification of the original payment system, which uses advanced design and technology to meet future needs.

Internet payment China's modern payment system

The CNAPS project includes the construction of a nationwide financial data communication network (CNFN), an infrastructure that connects many banking institutions to national and regional payment business clearing and settlement centers; and the development of a series of payment application processing systems, such as large-value payment systems, small Payment system to gradually replace the original decentralized payment systems.

The large value payment system (HVPS, HighValuePaymentSystem) is owned and operated by the central bank. It is the core of all payment application systems. It adopts the RTGS method to provide intra-day fund settlement for inter-bank fund transfers, financial markets, securities markets, and foreign exchange markets, and also for small payments. The system, intra-city clearing house, bank card network, and electronic exchange system of commercial banks provide end-of-day net settlement. The system was completed nationwide in mid-2005, with 1,500 financial institutions as direct participants, covering more than 60,000 branches. The original decentralized bank account structure needs to be merged and centralized to meet the needs of the unified national market.

The micropayment system (BEPS, BulkElectronicPaymentSystem) is based on batch processing and supports various types of debit and credit businesses. The system began trials at the end of 2005 and is expected to be rolled out nationwide in mid-2006.