OnIine Payment CIearing PIatform on the Horizon

Caixin Weekly August 29

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OnIine Payment CIearing PIatform on the Horizon

Caixin Weekly August 29

An online payment clearing platform will be established to provide clearing services for third-party payment platforms such as Alipay and Tenpay. The platform will be subject to the supervision of the People’s Bank of China， the nation’s central bank. Preparatory work started in late July.

By the middle of 2016， China’s online payment market had exceeded 16 trillion yuan （$2.4 trillion） in size. While the rapidly expanding online payment market has brought consumers great convenience，it also has problems. Third-party payment services have established their own clearing systems directly with various banks. This has resulted in overlapping interfaces and wasted resources. Different online payment platforms are unable to interconnect and share resources with each other under such circumstances. In addition， the varied technical standards between different online payment platforms cause risks and loopholes.

A uniform payment clearing platform will serve to promote the well-regulated development of online payment services. It aims to improve the efficiency of onlinepayments and will maintain records of transactions to facilitate capital retrieval and to control risks.

Some third-party payment service providers， however， worry about their information security. Moreover， the new platform faces the technical challenge of handling a massive amount of business during online transaction peak periods. According to estimates， establishing the technical standards and operation models for the platform will take at least one year. Once the platform is set up， it will redefine the relationship between third-party payment platforms， regulators and banks.