Overview of the development of cross-border e-commerce payment models and third-party payment systems

1. Traditional cross-border payment model

Cross-border payment can be mainly divided into two models: the traditional commercial bank cross-border remittance model and the cross-border Internet payment model involving third-party payment institutions.

1.1 Cross-border remittance model of traditional commercial banks

This model is similar to online and offline payment. First, domestic buyers inquire and select overseas products through cross-border e-commerce platforms, and then send order information to overseas sellers. Buyers need to purchase foreign exchange through bank counters or online banking in accordance with the requirements of overseas sellers, fill out a remittance application form, and remit funds to the account designated by the overseas seller. In this model, the buyer faces the risk that the seller cannot deliver the goods on time.

1.2 Cross-border Internet payment model involving third-party payment institutions

This model allows domestic buyers to select products on cross-border e-commerce platforms and complete payment through bank cards bound to third-party payment institutions. The third-party payment institution is responsible for foreign exchange exchange with the cooperative bank, and then transfers the funds to the bank account of the overseas seller. This model improves the convenience of payment, although buyers still need to be cautious about transaction risks.

2. The rise of third-party payment systems

With the advancement of technology, in addition to traditional online banking and electronic credit cards, payment models using third-party payment institutions are developing rapidly. Third-party payment systems reduce risks and provide protection when transacting online.

2.1 Operation process

On third-party electronic payment platforms, credit card information is transferred between the cardholder and the bank and cannot be viewed by the merchant, thereby reducing the risk of information leakage. The general transaction process includes the following steps: after customers purchase goods on the e-commerce platform, they pay through a third-party payment platform. After the payment is completed, the platform notifies the merchant to deliver the goods.

3. Characteristics and functions of third-party payment systems

With the popularity of online shopping, third-party payment systems have gradually become an important carrier to solve the problem of capital flow. Its main features and functions include:

• Independent Guarantee: As an independent institution, the third-party payment platform protects the rights and interests of both parties to the transaction.
• Supervision and Constraints: Provides fund transfer functions and can supervise transactions.
• Flexible payment methods: Users can complete payment through a variety of methods (such as the Internet, phone calls, and text messages).
• Easy operation: Compared with other payment protocols, third-party payment operations are simpler and easier to accept.
• Credit Relying: Relying on large portals, using their credit to conduct transactions, and enhancing mutual trust between merchants and consumers.

4. Expectations of the third-party payment industry

Third-party payment is not only an important part of modern financial services, but also a key factor in promoting the development of China’s Internet economy. As an emerging industry, third-party payment has demonstrated broad market demand, especially in the online shopping field with a high share. According to market analysis, the third-party payment industry will experience the dual challenges of high concentration and differentiation in the future, and will seek changes in the profit model.

4.1 Management regulations

The People’s Bank of China has issued relevant management measures to clarify the market access and regulatory requirements for non-financial institutions. These management measures provide institutional guarantees for the long-term development of the industry.

In this context, market participants need to work together to promote the healthy development of the third-party payment industry and achieve sustainable growth and innovation.