1. Prepaid card business
Prepaid cards are also called stored-value cards, consumption cards, gift cards, smart cards, points cards, etc. As the name suggests, they are cards that require payment before consumption. Prepaid cards are divided into registered cards and unregistered cards. Registered cards can be reported lost, but unregistered cards cannot be reported lost. Prepaid cards are prepaid wallet-style debit cards that transfer funds to the card upon the cardholder’s request and deduct funds directly from the card during transactions.
There are many different types of prepaid card issuers, mainly including the following.
(1) Telecommunications industry. China Mobile and China Unicom, their mobile phone cards are prepaid cards, such as China Unicom’s registered cards.
(2) Banks. The Pacific Expo contactless chip prepaid card issued by UnionPay and Bank of Communications.
(3) Merchants, referring to shopping malls, supermarkets, restaurants, entertainment, beauty, hairdressing and other industries.
(4) Third-party card issuers. Sign agreements with many merchants, deploy POS terminals, and issue a prepaid card for cross-industry consumption, which can be used to pay at many alliance merchants.
(5) Other institutions.
Recently, the People’s Bank of China and seven other departments have formulated the “Opinions on Standardizing the Management of Commercial Prepaid Cards” to standardize the management of prepaid cards.
2. Bank Card Acquiring
Bank card acquiring business refers to the settlement of cardholders’ card payments at merchants contracted by banks by the bank to which the card terminal belongs. This bank is called the acquiring bank, and the bank to which the cardholder belongs is called the issuing bank. The contracted bank (acquiring bank) in the bank card acquiring business provides merchants with RMB and foreign currency fund settlement services. The settlement process of the acquiring bank is to obtain transaction documents and transaction data from the merchant, deduct the fees calculated according to the rate, advance the cardholder’s transaction account and remit the money to the merchant. Generally, bank card acquiring refers to offline POS acquiring, and the participating institutions include acquiring banks (such as Industrial and Commercial Bank of China, China Construction Bank, Bank of Communications, etc.), UnionPay, Tonglian Payment, Digital Wangfujing, Shanghai Sande, etc. It can be seen that in addition to banks, third-party payment institutions are also allowed to enter this payment service field.