1. The concept of third-party payment
Third-party payment refers to an independent institution with certain strength and credibility, which signs contracts with major banks and connects with the bank payment and settlement system to facilitate the transaction between the two parties through the network payment model.
In the third-party payment model, first, after the buyer selects the goods, he uses the account provided by the third-party platform to pay for the goods (pay to the third party); second, the third-party platform notifies the seller that the payment has arrived and requests delivery. After the buyer receives the goods, inspects the goods, and confirms the goods, he notifies the third party to pay; finally, the third party transfers the funds to the seller’s account, and the entire transaction is completed.
2. Definition of third-party payment system
A third-party payment system refers to a system in which the system provider establishes a connection between merchants and banks through computer, communication and information security technology to realize monetary payment, fund transfer, and query and statistical services between consumers, financial institutions and merchants.
3. Constituent elements of the third-party payment system
(1) Customer refers to the buyer who has a third-party payment system account and a bank account.
(2) Merchant refers to the seller who has a bank account and a third-party payment system account.
(3) Payment gateway refers to the interface between the banking financial network system and the Internet network, and is a third party that processes merchant payment information and customer payment instructions.
(4) Payment platform refers to an online payment service platform that acts as a “middleman” in the transaction process between buyers and sellers, provides credit guarantees and corresponding value-added services after the transaction.
(5) Internet banking system refers to a new type of banking institution that relies on information technology and Internet technology to provide users with financial services such as account opening, account closing, fund transfer, inquiry, and reconciliation through the Internet.
4. Functions of third-party payment systems
The functions of third-party payment systems refer to online payment services provided on the Internet security system. They are the “stewards” of funds in transactions between buyers and sellers, and provide credit guarantees, fund transfers, real-time information inquiries, and innovative banking services to both parties.
(1) Credit guarantee. The cross-border third-party payment system provides credit guarantees for both parties to the transaction, acts as a “steward” of funds during the transaction process, ensures the smooth progress of the transaction process, avoids network risks, solves the credit crisis problem of online transactions, safeguards the rights and interests of both parties, and prevents the denial of transaction by both parties.
(2) Fund transfer. The cross-border third-party payment system establishes a safe, effective, convenient and fast fund transfer method between the two parties to the transaction, ensures the normal flow of logistics, capital flow and information flow, and increases the volume of online transactions.
(3) Query real-time information. The cross-border third-party payment system provides dynamic information query and transaction information processing services to both parties to the transaction.
(4) Innovative banking business. The third-party payment system cooperates with multiple banks to provide a unified application interface and financial innovation business services, while providing customers with more choices in payment methods, allowing buyers to enjoy banking services through the Internet anytime and anywhere.