Payment institutions that occupy the core links in the cross-border micro-e-commerce payment industry chain are currently divided into two types, one is commercial banks, and the other is third-party payment platforms.
1. Commercial banks
At present, many commercial banks, both domestically and overseas, have participated in the cross-border micro-e-commerce payment industry chain, such as China’s Industrial and Commercial Bank of my country, Agricultural Bank of China, Bank of China, China Construction Bank, China Postal Savings Bank, etc. So far, almost all large cross-border e-commerce websites support bank cards such as UnionPay, MasterCard, JCB (Japan’s world-wide international credit card), VISA (Visa credit card), and American Express. Consumers holding these bank cards only need to enter the card number, name, password and other information online according to the prompts when shopping in cross-border micro-e-commerce.
Let’s take credit card collection in overseas acquiring business as an example to briefly explain the cross-border payment industry chain with a chart.
The issuing bank in the figure refers to the financial institution that issues credit cards, generally a commercial bank. If the consumer uses an ICBC credit card, then the issuing bank is ICBC. The card organization refers to an institution that provides settlement services for issuing banks and acquiring banks.
In cross-border micro-e-commerce, the previous domestic merchants can directly cooperate with the acquiring bank. Obviously, this method is not feasible, because the acquiring bank is in China, and the merchants are abroad, so most merchants do not have the ability to directly connect with the domestic acquiring bank. To complete the connection, another docking institution is naturally needed. So, this gave birth to third-party payment institutions.
With third-party payment institutions, we can see such a cross-border payment industry chain: after domestic consumers place an order and pay, the payment flows from the issuing bank to the acquiring bank through the card organization, and the acquiring bank then flows to foreign merchants through third-party payment institutions (such as Alipay).
2. Third-party payment platform
Consumers can directly complete cross-border transactions online as long as they register their own accounts on the third-party payment platform. As long as the payment is completed, they don’t have to worry about the remaining funds. The reason why the third-party payment platform can play such an important role in the cross-border micro-e-commerce payment industry chain is that it has mature online payment technology and is very familiar with the e-commerce industry. However, since third-party payment platforms are not financial institutions, they are not qualified to issue cards.
The relationship between commercial banks and third-party payment platforms in the entire payment industry chain is not an antagonistic competitive relationship, but a complementary, cooperative and integrated relationship. Of course, as the cross-border micro-e-commerce market matures and improves in the future, the cross-border micro-e-commerce payment industry chain may undergo new changes, that is, users directly bypass commercial banks and complete cross-border payments through third-party payment platforms.
In fact, for cross-border micro-e-commerce, which third-party payment to use is not determined by yourself, but by the platform you are on.