Analysis on the present situation of third party payment and its future development

After nearly 10 years ' development, electronic commerce in our country is in the fast lane of rational value regression and blowout application development. Sensitive international investors position the future Internet business opportunities in China, positioning E-commerce, especially vertical business-to-business business opportunities in China, and the Chinese government is the digital finance, digital media, E-commerce, distance education, telemedicine, digital community, such as the unified positioning of the modern service industry, to vigorously develop. When the Internet from a loss of information to provide, to the short-lived business model, to the electronic commerce, the real value of the internet to humanity began to show. The development of Internet industry supported by China's sustained economic growth can not be stopped, because users need both services and business, so internet-based information services and e-commerce boundaries begin to cross and overlap. Regardless of how the Internet's business model is explored and innovated, every business model design must take into account payments and related issues. Therefore, it is not surprising that governments, investment circles, industry and media pay attention to our online payment.

Before the arrival of the ninth session of China's electronic commerce Conference, we will discuss some problems of the third party payment platform and share with the industry.

Re-classification of online payment in China

From the point of view of industrial chain, China's online payment is divided into the following categories:

1. The Bank of the source of the industrial chain: the online payment service provided by the Bank net banking;

2. The horizontal alliance of the source Bank of the industrial chain: the online payment service provided by the Central bank background and the companies connecting the banks, including the possible payment platform set up by the central bank, the investment of commercial banks or the payment platform of the alliance;

3, the industrial chain of large enterprises: including telecommunications operators, public service providers, Internet operators, E-commerce platform, these enterprises often in the past business development has accumulated a large number of Internet enterprise users and individual users, the provision of payment services first for their own operations and services, and then to their own users as the core, Expand to related fields.

4. Horizontal alliance of large enterprises in industrial chain: refers to the joint establishment of payment platform among the above large enterprises;

5, the industrial chain of large enterprises and banking alliance: large enterprises and banks vertical joint establishment of payment platform:

6, the third party payment platform: refers to neither the bank investment, nor to provide payment services for their own operations, but to the Internet, a large number of enterprises and individuals to provide payment services platform;

The development of business on the Internet depends on two aspects, the first is the user, the second is the service. There is a difference in the competitive advantage of different types of payment service providers. According to the above classification, the third party payment is in the middle of the industrial chain, along with the development of the first 5 kinds of payment service, the market of the third party pays is bound to horizontal subdivision and vertical union.

Ii. What service value is provided by third party payment

The prospect of third-party payments is likely to be complicated by the combination of electronic payment services and Third-party payment services in China.

From the perspective of user-oriented services, the means of payment are not sufficient to distinguish the type of payment service. In the past, the industry of Gateway payment, wallet payment, mobile phone payment, as a distinction between the type of payment service providers, and in fact, the difference between the payment service providers and in the industrial chain position has a great relationship. The barrier of payment means is not high in technology choice, and the user and market advantage accumulated by different industry chain link, and the service cost difference brought by it, is essential. What kind of service does a third-party payment provider offer?

Third-party payment is to provide the Government, enterprises and institutions with a neutral and impartial personalized payment settlement and value-added service for their customers, based on the commercial cooperation with banks and the function of payment and settlement of banks. Outstanding Performance in:

1. Provide cost advantage. The payment platform lowers the cost of the Government, enterprises and institutions, and meets the demand of the enterprises to focus on the development of online business. China has large and small enterprises more than 26 million, with banks directly linked to the enterprise platform and business platform is few, a large number of enterprises embark on e-commerce, but also need to select Third-party payment services;

2. Provide competitive advantage. The interest neutrality avoids the competition with the service enterprise in the business, the enterprise on the third party payment platform, does not appear its business and other type payment platform's business direct, the indirect competition, also avoids the user, the promotion, the network channel direct, indirectly by other payment platform manipulation situation.

3, to provide innovative advantages. The personalized service of the third party payment platform makes it possible to synchronize and customize the personalized payment and settlement service according to the innovative business model of the Service enterprise's market competition and business development. While other types of payment services, the characteristics of their platform in the industrial chain, to some extent, limited the enterprise users in the business model innovation. Because the business of a large number of enterprise users, essentially in a general business model of the transformation and competition, which for the long-term development of enterprises is risky, because the innovation of business model will be limited, business information protection may not be enough.

Third, the user how to choose the Third-party payment service

The attitude of Internet users to third party payment service is changing with the change of third party payment service and personal network consumption preference. Can be divided into three stages:

1. Early stage of development: this stage bank's net silver function is very limited, combined with the low efficiency and the function is open cautious, make the initial development of most Internet enterprises can only choose the third party payment platform to bravely try and promote their own business; At this stage, enterprise users choose the third party payment platform more cautiously, and personal network users are often unable to control the choice of payment platform. Because of the small influence of individual users, in addition to this phase of Third-party payment platform is often hidden behind the merchant and do not do too much publicity, many enterprise users once the selection of payment platform is often more stable, loyal, and individual users often prefer to think that they are a certain mall users do not feel that they are a payment platform users.

2, the medium-term choice of low-cost services in the short-term goal: this phase of a lot of so-called leading, but lack of operational experience of the payment platform, banks began to pay attention to the network banking business, but still not the main business direction of the bank. Users at this stage, due to more in the attempt to pay the Internet, in addition to the fierce Internet competition and other factors, many new enterprise users would rather choose low-cost or even gift payment services, or to pay security considerations connected to a number of payments at the same time to cut the flow to the lowest cost. Since enterprise users have not yet realized that the services to their end-users also include outsourced payment services, and that the choice of payment service providers affects their future commercial interests, some of the newly emerging individual user segments have no difference in the choice of online payment providers, while some experienced individual users Has begun to show loyalty and trust to the old payers.

3. The future stage serves its own long-term business strategy: the low cost of every aspect of business is not necessarily the ultimate low cost. In the future stage, enterprise users pay more attention to the competitiveness of the industry chain positioning of payment service providers and their own business, including the enterprise and personal user resources owned by the payers, the resources of electronic marketing channels, the ability of advertising positioning, etc. And enterprise users are very concerned about the overall innovation ability of payment service providers can keep abreast of business transformation, it is critical to grasp the needs of the enterprise, while individual users may choose different positioning of the top three payment service provider's wallet to meet their network consumption and value, and individual users of the payer's loyalty increased, Affect the business merchant to the payment service provider's choice.

Therefore, the long-term strategic view of outsourced payment services and their added value is the Internet users and offline users in the future to choose an online service provider of important criteria, payment fees may degenerate to a relatively minor factor to consider.

Iv. How the Government views third party payment services

The Government's attitude towards third party payment services is closely related to the service areas of third party payment, transaction flow, operation mode and market competition. As more businesses embark on internet business, the government's focus on online vendors will not be less than earlier information security concerns. Because a lot of economic data, industry data, transaction data will be related to the payment service provider, through the analysis of these data may infer the state of the economic operation, even the country's highly confidential projects can be spied on, more importantly, with the virtual currency and Third-party payment services, such as the international payment and the implementation of the function, The country's financial system and economic behavior will be more complicated, the country's monetary policy has become more complicated, the balance of payments has become more complicated, business operations more elusive, and even the national revenue has become more complicated.

Therefore, the Government should standardize the third party payment to promote the development of modern service industry, promote the development of traditional industries to electronic commerce, and pay more attention to the financial stability, commercial legality, national security and other factors, and take necessary measures.

V. Why investors prefer third party payment

Investors pay attention to China's third party has a profound reason, mainly includes three aspects:

1, the direct profit prospect is good. The development of E-commerce in China will bring about the demand of online payment, in accordance with international law, this online financial value-added services, the volume amplification and the user gathered to a certain extent, will realize the operating profit and loss balance, when the sales continue to enlarge, the profit is considerable;

2. The investment portfolio is valuable. Investors, especially for the internet and e-commerce investors, are well aware of China's huge business opportunities in these areas, even if the payment of short-term earnings shortfalls, from the portfolio point of view, is also worthwhile;

3, the industry unique easy to withdraw. The payment industry is the operation of the Internet to provide financial value-added services, so the investment across a number of areas for investors to create the concept of high price exit provides the possibility;

4, grasp other investment opportunities. The transaction data of payment platform provides the opportunity for domestic and foreign investors to capture the operation and development of the enterprises in the area of concern, and the investors can determine the investment quickly to obtain the high profits without even having to do too much due diligence.

5. The Portfolio business promotes each other. The consumption data of enterprise users and individual users accumulated by the payment platform, it provides data support for the competition strategy, sales promotion strategy decision of other enterprises invested by investors in China, which helps to promote the development of investment enterprises other than payment, and the development of these enterprises also plays a role in promoting the traffic growth of the payment platform.

Vi. challenges and choices faced by third party payments

Third party payment currently facing the hand-to-hand combat seems very abnormal, but in line with the objective law of industrial competition. The reason is that the market is still in its infancy, the demand of enterprise users and individual users has not deepened, and the differentiated services of the payers are not enough. Low-level supply can be enlarged indefinitely, high-level demand is not satisfied, supply and demand conditions determine the market competition and price war inevitable. Although homogeneous competition is cruel, it is also an important impetus for industry integration and industrial upgrading. At present, third party payers are facing challenges from both inside and outside, including:

Challenges to see:

1, competitive pressure: the competition in our definition of the industrial chain, large customers in volume and users squeeze even directly to provide payment of competition, industrial chain source network banking services to enhance the formation of competition, in fact, aggravated the third party to pay the vicious competition. Limited by Third-party payers in the industry chain without strong user resources, network banking services in the initial development, the central bank's policy is uncertain, coupled with the operation of the payment service providers not enough, especially the investors and the buyers of the different long-term development strategy, in order to obtain users and traffic, so that the industry has a clear price war, Mutual attack and other competitive pressure. From the direct low price, free, to the service fee discounts, the service competition to the edge of the sigh. On the surface to pay the industry in full swing, how large merchants can with the third party to pay the business round talks to the lower prices, the large number of merchants are shop big bullying. The responsibility for this is not in the merchant, but in the low-level competition of the payment service provider.

3, input pressure: Due to the rapid changes in the market and technology, as a provider of business online transactions, service platform security investment, platform processing capacity input, the system to meet the needs of diverse users of the development of investment, market development and marketing investment, but also dynamic increase. These inputs and the cost of operation, the source of the industrial chain of bank transaction costs are relatively high, so that third-party payers in order to long-term development must balance and bear these input pressure.

2, Profit pressure: The above competition and input pressure, so that most of the short-term third-party payers in the profit and loss balance reluctantly operating. In addition to the individual determined investors, most of the investor can not do not make a profit assessment of their business performance, so that operators in all aspects of investment needs to balance, it is easy to exaggerate the propaganda and the poor quality of service. Failure to continuously improve service quality is fatal to payment services.

4. Service Innovation Pressure: The innovation of payment service includes many aspects: such as mobile payment, telephone payment, mobile POS and other means of payment innovation, such as wallet payment, point card integral payment, such as payment platform model innovation, B2B,G2B,B2B2C and other payment service model innovation; Customer service and many other aspects of innovation. In addition, the key innovation of the payer should focus on the upstream and downstream cooperation innovation of the industrial chain, the service innovation of E-commerce platform and the high-level demand of the enterprise, and the service innovation of mining the payment demand from the traditional transaction and the logistics market.

Unseen Challenges:

1, the risk of security: on the one hand, third-party payment service providers because the core is to provide payment services through the online, the industrial chain in any one of the links in the security risks, may be transferred to the payment platform; On the other hand, the change of network technology is changing rapidly, to provide the service provider Its security level can not be lower than the level of the bank, to continue to invest, always monitoring, emergency handling of various disputes. Foreign payers in the operating budget of a considerable proportion of income is invested in security and security disputes, for domestic third-party payers in the context of almost no profit, the risk of uncertainty, but also increased the pressure on the operators.

2. Policy risks: In the case that the low level competition and the diversification payment demand are asymmetrical, the payment merchant tries to carry out various financial services in order to operate and develop, the uncertainty of the main service qualification and the service scope of the payer is influenced by the policy factors, which affect the levels of input and service, and the distortion of some services The source of the industrial chain and the cooperation of the enterprise end also doped up more man-made factors. The uncertainty of policy and the monopoly of departmental resources have increased the rent-seeking, distorted the service, and the risk of operation is jianzaixianshang with the rapid increase of service volume and users.

The pattern of payment market is still not formed, and the change of its pattern has a great relationship with the national policy of every link in the industrial chain. For example, the central bank's policies and initiatives on virtual currency and online payment services, the possibility of banks ' strategies and alliances in net banking, the alliances and self-development initiatives of various telecom operators, Internet operators and E-commerce platforms in online payment services. No matter how the market pattern changes, small and medium-sized enterprises and focus on the main business of large and medium-sized enterprise market, is still the important direction of third-party payment service providers. The third party payment market not only will not be squeezed, but also in the process of innovation and breakthrough in the rapid development of China, including the Internet and E-commerce, the development of various industries, play a supporting role that is difficult to replace.