Following last year’s “Double Twelve†launch of “Cloud Flash Pay†and relying on Apple Pay to grab a place for mobile payment, China UnionPay officially launched the UnionPay QR code payment standard in this year’s “Double Twelveâ€, proclaiming UnionPay leading many commercial banks. Join the scan code to pay for the battle.
UnionPay joins the scan code payment camp
The China UnionPay two-dimensional code payment standard issued by China UnionPay includes two enterprise standards: "China UnionPay QR Code Payment Application Specification" and "China UnionPay QR Code Payment Security Specification".
“We are concerned that mobile payment is showing a diversified development trend. The payment needs of small and micro merchants and cardholders also cover multiple levels. In the current market, QR code payment has gradually become popular, and UnionPay’s card issuance and acquiring members The users of the institution and UnionPay card have certain needs for the promotion and application of this payment interaction mode, but the market demand for inter-bank interconnection is not well satisfied. For this reason, under the joint promotion of member institutions, UnionPay officially released the 'UnionPay QR Code Payment Standard' to provide more and more choices for UnionPay cardholders to support the orderly development of UnionPay QR code payment business.†Cai Jianbo, Executive Vice President of China UnionPay, at the press conference Said.
He also said: "On the occasion of the first anniversary of the launch of UnionPay, we will jointly innovate products with commercial banks, enrich the content of cloud flash payment, and jointly release the payment standard for UnionPay QR code. We will work with industry parties such as commercial banks. Realize standard symbiosis, market co-construction, and resource sharing, and jointly open a new era of networking common for scanning code payment."
In fact, before UnionPay joined the scan code camp, some commercial banks began to test the water and launched their own QR code payment products in advance. For example, in the second half of this year, ICBC took the lead in launching ICBC QR code payment products. Minsheng Bank also launched a scan code payment product at the end of October this year.
“The payment of this new type of Internet payment product through ICBC QR code extends financial services to all areas of economic and livelihood, especially small and medium-sized merchants that the bank has been difficult to reach in the past. In the past five months, as of the end of November, ICBC closed The total number of single merchants reached 2.487 million, including 1.031 million traditional POS merchants and 1.439 million new QR code payment merchants,†said Wang Dufu, president of ICBC Peony Card Center.
"Flash payment" mode into a chicken rib
It is worth noting that on December 12 last year, China UnionPay had jointly launched the Union Pass with more than 20 commercial banks. This is the first time that China UnionPay has entered the mobile payment field.
There are two modes of UnionPay flash payment: the initial is “offline flash paymentâ€, and then the “cloud flash payment†on the mobile phone side. As a contactless payment product, some are similar to Paywave and MasterCard's Paypass launched by Visa, a foreign banking organization. To put it simply, the biggest feature of flash payment is the small amount of payment-free password. If the merchant pos machine is completely modified, you can pay by one phone in the card reading area, no need to insert the card and enter the password.
Technically speaking, "flash payment" is a mobile payment method based on NFC (Near Field Communication) technology. The difference with QR code scanning is that NFC is a high-frequency wireless communication technology that does not require the use of a mobile network. A mobile phone using NFC technology is equivalent to turning a mobile phone into a payment terminal, and can directly pay for it.
So why are you familiar with the QR code now and are very strange to "Flash Pay"? The main reason is that the two-dimensional code technology is mainly promoted by e-commerce, and the product is connected with the payment platform of the e-commerce, thus realizing the strong alliance of “e-commerce platform + payment platformâ€. For example, in Taobao, Tmall, if you do not use Alipay, it will be difficult.
NFC technology is good for mobile operators, so mobile phone manufacturers such as Apple, Samsung, Huawei, and Xiaomi have launched a variety of "Pay". The UnionPay has seen the enthusiasm of mobile phone manufacturers for the payment market and actively cooperates with them. At present, there are “Apple Pay†and “Samsung Pay†in the domestic market.
On December 7th, Apple Pay head Jennifer Belle said that Apple Pay has been online for two years, from the first four support stores to the support of about 4 million retail stores, which already account for US retailers. 35%.
However, in the Chinese market, Alipay and WeChat payment have been generally accepted. Apple Pay in "Flash Pay" mode is no longer able to replicate its success path.
Analyst's previously published "China's third-party payment market research report in the first half of 2016" data shows that the overall transaction volume of the industry in the first half of the year reached 1,347.6 billion yuan, Alipay, Tenpay, Lacala occupy the top three market trading shares; Alipay ranked first with a market share of 55.4%, and Tenpay (WeChat Pay) ranked second with a market share of 32.1%.
Only Alipay and WeChat pay for the two scanning code to occupy the market share of nearly 90% of the entire mobile payment market, the "flash payment" model has become a chicken. In this context, it is not surprising that UnionPay changed its original intention and joined the scan code payment war.
Of course, the scanning code payment mode has become mainstream and not smooth sailing.
Before 2014, Alipay, WeChat Payment and China CITIC Bank had cooperated to promote the QR code scanning payment service, but it was stopped by the central bank to pay certain security risks under the offline QR code. However, the tenacious Alipay and WeChat payment did not shrink. After the technical improvement, the offline scan code payment was still vigorously promoted.
In July 2016, the central bank issued a document confirming the market position of the QR code payment. At the same time, the Payment and Clearing Association issues the “Bar Code Payment Service Specification†(Draft for Comment) to the payment institution, and the opinion draft clearly indicates the safety standards that the payment institution must follow to carry out the barcode business.
Since then, offline scanning code payment has exploded, so that now, whether in the supermarket or in the street shop, you can see the obvious QR code payment icon. It is a reality to go out without a wallet.
Square mode VS three-way mode
Currently, there are “three-way model†and “quartet mode†in the payment market.
The four-party model is the four types of participating parties: card organization, card issuer, merchant and acquirer. At present, China UnionPay, Visa, MasterCard, etc. all adopt the Quartet mode; while third-party payment institutions such as Alipay and WeChat pay directly connect to the bank and bypass the card. The organization conducts online payment, that is, adopts a three-party mode.
China UnionPay emphasized in the "Respondent's Question" issued by the official website that the quadrilateral model of UnionPay's two-dimensional code payment has many advantages.
First of all, the Quartet model uses payment security as the bottom line to ensure the security of key elements such as cardholder accounts and funds. UnionPay two-dimensional code payment is based on the four-party mode of card organization. The difference between payment and physical bank card payment is only the change of payment information interaction mode. The background account is still based on the physical bank card account. Because it is still based on the bank card account, there is no financial risk caused by the deposit of funds in the virtual account, and the safety of consumer funds is more secure. In addition, commercial banks can obtain transparent, complete payment information consistent with traditional bank card payments, which is beneficial to risk identification management and customer relationship management.
Secondly, the payment tokenization (Token) technology is used to protect account sensitive information, ensure the security of account information in the process of storage, processing and transmission, and prevent the risk of account information leakage.
Third, the technical modes are unified under the same scenario and can be interconnected. In the same two-dimensional code payment scenario, a unified technical solution and mode are adopted to realize service interconnection between different organizations to ensure consistency of user experience.
Fourth, compatible with relevant international standards. The technology extension is reserved, and the future can be compatible with international standards related to two-dimensional code payment by extension, so as to ensure cross-border interconnection of domestic and overseas QR code payment services in the future.
Dong Xiwei, a visiting researcher at the Chongyang Financial Research Institute of Renmin University of China, said that the Quartet model has a comparative advantage. Under this model, the interests of all parties to the cooperation can be guaranteed, especially if banks are more willing to participate. In addition, because it is still based on bank accounts, there is no financial risk caused by funds deposited in virtual accounts, and consumer funds are more secure.
Xue Hongyan, a senior researcher at Suning Financial Research Institute, said that compared with the three-party model, the advantage of the Quartet model lies in the unification of technical standards, which can achieve interoperability across payment institutions and smooth out the payment risks caused by technical shortcomings of small and medium-sized payment institutions. Hidden dangers; but at the same time, the participation of card organizations will also increase the cost of the payment transaction itself. If the subsidy strategy is not adopted in the promotion of merchants, it may face greater difficulties.
The payment war is far from over
At present, Alipay's advantage in online third-party payment is very obvious, and Tenpay relies on the expansion of WeChat to secure the second place in the payment industry, and continues to impact toward the first position.
But at the same time, Alipay and WeChat payment also have a pain point: the market demand for inter-bank connectivity is not well met, and this is the advantage of UnionPay. Therefore, the entry of the UnionPay is likely to divide the existing market of Alipay and WeChat, forming a three-pronged pattern.
Analyst Wang Pengbo of Analysys believes that China UnionPay has launched a two-dimensional code payment standard to provide a safety-related standard basis for the design and development of two-dimensional code products for China UnionPay and banks, so as to realize the interconnection of bank card barcode payment between institutions. Interoperability laid the foundation.
However, UnionPay also faces some difficulties in implementing QR code payment, such as the high cost of expanding offline merchants. Therefore, the use of small and medium-sized third-party payment institutions has become a shortcut.
At present, “Quick Money†is the first to announce support for the UnionPay QR code payment standard. All the QR code payment products of Quick Money can be used to complete any transaction in the online and offline scenarios that support the UnionPay standard.
However, for platforms such as Jingdong Payment, Baidu Wallet, Suning Yifubao, and Wanda Express, which have strong strengths and have their own e-commerce resources, either launch third-party payments themselves or launch third-party payments through acquisition and holding. They are still trying to take a slice of the third-party payment field in this trillion-dollar market.
At present, Baidu wallet has gained growth through its own living consumption scenes such as Baidu glutinous rice and Baidu take-out; Wanda Express has strengthened its layout through many merchants in the offline Wanda Plaza; Suning Yifubao also through its own Suning Tesco and offline The Suning store has built a payment ecosystem; the US group has been building its own payment system, and a few months ago, it also completed the payment layout by acquiring a third-party payment.
According to the two-dimensional code payment service specification previously filed by the China Payment and Clearing Association, there are only two ways to scan the code payment service in the future: one is that “the payment institution will expand the acceptance mode according to the self-developed users and expand the acceptance business. “The business is carried outâ€; the other is “to be handled by accessing China UnionPay or after the unified clearing platform organized by the Payment and Clearing Association is put into operation, and transferred to China UnionPay through the unified clearing platform for processingâ€.
It can be seen that except for a few industry giants with ideals and strengths, they can “play by themselvesâ€. In the future, most small and medium-sized payment institutions may have to join the UnionPay, otherwise there is no room for survival.
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