The challenge of UnionPay

Summary: One side is the offline payment market biggest bank card transfer organization, one side is the Internet online payment market giant, UnionPay and Alipay's infighting gradually escalated. Due to some well-known reasons, Alipay will stop all offline POS business. August 2

One side is the offline payment market biggest bank card transfer organization, one side is the Internet online payment market giant, UnionPay and Alipay's infighting gradually escalated.

"Due to some well-known reasons, Alipay will stop all offline POS business." "August 27, Alipay on its official microblog on a paper announcement, will pay Bao and UnionPay's" grudges "further dominance.

Alipay publicly closed the line to close the business, in the majority of the industry appears to have tried to "amnesty" the incorporation of third-party payment agencies, "demonstrations", but there are insiders questioned Alipay move to escape the "false fall" suspicion.

Behind the entanglements, there is no doubt that UnionPay and Alipay's interests of the territory of the dispute.

And for the so-called "well-known reasons", "China business newspaper" reporter Call Alipay and UnionPay, Alipay did not make a positive explanation, UnionPay also said it is unable to respond to Alipay move.

August 29, the China Settlement Association convened a number of third-party payment agencies to meet, in the meeting of the "incorporation" by the vast majority of Third-party payment company's objections, that UnionPay should win market recognition through competition, and should not take the behavior of the quasi-government forced to demand third-party payment agencies are connected UnionPay network.

Pay for the business under the dumping line

August 27, Alipay stopped the offline POS business, it was launched in March 2012, the Logistics POS strategy, which includes the Logistics POS payment Scheme and the Electronic Business logistics payment system investment.

According to the plan, Alipay will invest 500 million yuan on the offline POS business, including the POS hardware upgrade, the whole system development and the market input three parts of cod (C.O.D.) market.

According to the reporter understand, Alipay originally planned to invest 30,000 units in 2012 to the market Alipay POS terminal equipment, but the actual implementation process is not imagined so fast. "Alipay under the line of POS business before the main line for the electricity market to provide services, at present, the market to provide the POS terminal collection equipment Tens of thousands of units." "Alipay related people respond to reporters.

This Alipay announced the abandonment of offline billing business is the intention of strategic adjustment? These Alipay people do not agree.

According to a third party payment industry researcher Analysis Alipay to make this move, most likely is to pay UnionPay to see. "UnionPay requires member banks to work with it to Price Alliance, the payment rate to upgrade and unified pricing, which will increase costs, adverse to the development of the industry, so Alipay choose ' broken wrist ' deterrent industry." ”

What he refers to as "price alliance" is the "2012" document 17th (hereinafter referred to as "17th") issued by UnionPay last December on the cooperation between standard and non-financial payment institutions for UnionPay card business. It is said that UnionPay has called on the member banks to clean up the Open interface of the third party payment company in article 17th and to collect the bank card business to achieve the centralized approval, unified access and unified pricing of the "interface" service. UnionPay pointed out in article 17th that "there are more than 630 UnionPay card business interfaces between 29 au organizations and 17 major member banks", UnionPay considered that these non-gold institutions "generally around the UnionPay network, the use of various irregularities to carry out business, disrupting the market order, undermining the interests of member banks."

Alipay is the only non-gold institution that UnionPay calls "bypassing the UnionPay network".

If a member bank carries out the initiative of UnionPay in article 17th, it will undoubtedly mean that the payment under the PO Line can not bypass the UnionPay network and direct access to the banking network. A person close to the regulatory level told reporters that for the externally interpreted UnionPay "amnesty" third-party payment companies, different banks, the attitude of several major share banks are not positive and do not agree to "ban" third-party payment companies, state-owned banks have said to first observe "what other banks to say", UnionPay's top executives recently convened several major banks to express their views that the implementation effect was not ideal.

While most banks are on the sidelines on the UnionPay initiative, they are not unresponsive. In August, the head office of the state-owned banks has formulated the "third party payment business management measures", clear third party payment business using unified management, centralized examination and approval methods (see this newspaper August 26 reported that "the Bank of each other was the fall of the big line to stop the third party to pay the" joint ""

And in late August, the media exposure of UnionPay at the board meeting of the "on the further regulation of the non-financial payment institutions UnionPay card transactions to maintain the interests of member banks and UnionPay" (hereinafter referred to as "UnionPay Bill"), but also further intensified the conflict between UnionPay and third-party payment companies.

The work goal of UnionPay in the UnionPay bill is: Before December 31, 2013, complete the transfer of the non-gold organization line UnionPay card trading business, unify the transfer of UnionPay; before July 1, 2014, the realization of the non-gold agency Internet UnionPay card transactions fully access to UnionPay. This means that the third party payment agencies online under the full access to the UnionPay network.

Moreover, it is stipulated that the receiving institution does not trade the UnionPay card which is transferred by the UnionPay network, and the offline trading has been traded since January 1, 2014 and the online transaction from July 1, 2014 onwards, according to the transaction amount of two out of 10,000 respectively to the card issuing agencies and receiving agencies to collect brand service fees, And in accordance with the transaction amount of five out of 10,000 to the receiving institution to receive the payment card transaction transfer compensation fee, the receipt of the institution is not a member of the Union, the relevant costs to direct access to the card issuing agencies.

"The cost of placing POS terminals under the line is very high, and offline business to go, if in accordance with UnionPay unified pricing after no price advantage, coupled with the current by UnionPay online under the line are encircle, it can only temporarily give up business volume accounted for relatively small offline business. "Alipay inside a senior person to explain to reporters, why stop offline business."

The challenge of UnionPay

The competition between UnionPay and third party payments is becoming increasingly white-hot.

Online payment market, UnionPay as the largest bank card transfer organization, UnionPay card trading fee is divided into years of compliance with the "7:2:1" distribution ratio, that is, the issuing bank accounted for 70%, the receipt of institutions accounted for 20%, UnionPay as a liquidation of the transfer agencies accounted for 10%. But the online payment market has no established profit-sharing mechanism.

"At present, domestic online payment business over 90% do not take the UnionPay channel, the rate follows the market-oriented negotiation rules, the rapid development of the industry, payment innovation is very active." In fact, offline billing business, the payment company also has a direct connection with the bank's technical capabilities. "An insider from a third-party payment agency said.

Most of the online payments do not take the UnionPay channel or do not access the UnionPay network, which means that the pay market on the UnionPay is unable to obtain a 10% fixed share of the offline payment market.

At present, the third party internet payment market concentration is high, Alipay, Tenpay occupy the first two of the third party payment business, China UnionPay Holdings of Shanghai UnionPay Electronic payment is closely followed. "China's pay and clearing industry Operation report (2013)" (hereinafter referred to as "the report") shows that the first quarter of 2012, Alipay, Tenpay and Shanghai UnionPay payment market share of electronic payments are 45.2%, 21.5% and 11.3%, three enterprises accounted for the industry market share of up to 75.3%.

More and more third-party payment companies are also targeting the offline billing market compared to the white-hot online payment market. "Offline receipt market is a relatively mature market in the area of payment, but in most of the two or three-line regions, the penetration rate of bank card receipts is not so high." Many trade and consumption areas are still using cash transactions, so POS receipts business is still a blue sea market with rapid development potential. "The above-mentioned third party payment agency people think.

What makes UnionPay feel anxious is that the domestic UnionPay card issue is relatively concentrated and the top ten bank issuance accounts for more than 90% of the total. This means that a third party paying agency that is unilaterally and rapidly advancing online can only talk about the 10 banks and make a direct connection with the banks, and it will allow UnionPay to lose room for a fee to sit down online. In fact, there is a strong desire to have a direct connection between some big banks and offline delivery agencies.

In view of this, UnionPay online and on-line payment status are challenged, which is one of the main reasons for UnionPay's "amnesty" third-party payment agency since last year.

According to the response of UnionPay to the media, the commercial banks, non-gold institutions and other industries to carry out UnionPay card business, the use of the "UnionPay" brand, should abide by the joint recognition of all sides of the UnionPay card business rules, technical standards and market norms.

Prior to this, the central bank issued the "bank card receipts Business Management measures" 26th stipulates that the receiving institution will send the transaction information directly to the issuing bank, should be in accordance with the card issuing bank to comply with the relevant bank cards clearing institutions agreed to sign a cooperation agreement, clear transaction information and capital Security, The rights, obligations and liabilities for the protection of cardholders and merchants ' rights and interests.

In the view of UnionPay, the precondition for the receiving agency to send the transaction information directly to the issuing bank is "the issuing bank complies with the agreement with the relevant bank card clearing institution". For UnionPay card business, the agreement here is embodied in the "UnionPay card Business Operation regulations."

"If you use the UnionPay card brand but did not go through the UnionPay network, what appeared the risk of UnionPay does not see, it is difficult to risk prevention." One of the insiders at UnionPay said.

The risk control of bank cards is also one of the considerations for UnionPay to consider a comprehensive access to UnionPay network by a third party payment institution. In response to the media, UnionPay said in the process of carrying out UnionPay card business, some non-gold organizations have the types of alteration transaction and the rules of MCC, etc, which make it impossible for commercial banks to accurately identify the transaction scene and customer's real transaction behavior, and it is difficult to effectively implement the risk control, which can easily conceal the false card fraud, Network fraud, money-laundering, such as hidden risks.