Domestic Third-Party Payment Regulation Research

With the rapid development of economy and science and technology, computers and internet have becoming more and more popular, exerting a profound influence on people’s way of life and effectively propelling the emergence and prosperity of E-commerce. As online shopping and transactions is getting increasingly frequent, there is more and more intensive demand for fast, convenient, and safe payment methods from both sides of the transaction, so third party payment platform has been widely used correspondingly. The so called third party payment refers to the third party of independent agency that is reliable and guaranteed in its strength and reputation and establishes platforms for transaction support to realize the effective transition to payment and settlement system of banks by means of online payment tools, for example, bank cards and other card-based tools or virtual currency and virtual accounts. In the mode of third party payment platform transactions, the purchaser chooses what goods to buy and sends the payment to the account offered by the third party, who will inform the sellers of the payment and that goods can be delivered. After receiving and checking the goods, the buyer will inform the third party to pay the seller and the third party will send the specific payment into the seller’s account. According to the international statistics, in 2008 the third payment market reaches over 270 billion Yuan, a market of 1 trillion Yuan in 2010, and more than 2.1 trillion Yuan in 2011. In 2013 the overall transaction of all the third party payment agencies reaches 17.2 trillion Yuan. Up to February,2014, there have been 250 third party payment enterprises that are approved by the Central Bank. With the expanding of the market, competition of this industry is getting increasingly fierce. Owing to its features of information asymmetry and natural monopolies, there are inevitably many problems and hidden troubles in the third payment industry and the problems of industry security is getting more apparent, for example, short of qualification as main body, abuse of third party payment platform, failure to protect the customer’s rights and appropriation of excess reserves. In practical operation, network failures, online fraud, and network gambling have broken out for many times and besides, third party payment also provides convenience for illegal activities, such as money laundering.a professor from Central University of Finance and Economics, said that third party payment agencies are similar in nature to financial agencies and have much in common in their business. However, third party payment agencies are not financial agencies. Unlike banks, the main responsibility of third party payment agencies lies in capital turnover and gaining profits through commission charges without supervising whether customers are using their account money within legal permission. The looseness and loopholes in supervision cause the online third party payment enterprises to be taken advantage of and become the platform for illegal activities. For example, there is relatively high possibility of money laundering, gambling and illegal cash where exists great risks. Therefore, it is not only necessary but also critical to strengthen supervision because if there were no effective supervision, all these risks and problems will hinder the development of third party payment industry. Effective supervision will help to prevent third party payment from causing risks and hidden dangers to economic and financial systems, thus guaranteeing a relatively fair and transparent competitive environment of stability and provide a relatively loose and risk-controllable space for the marketized agencies to develop and facilitate the overall market efficiency of third party payment.The research project first introduces the situation of third party payment supervision at the present stage in China, analyzes the present supervision policies and points out the problems existing in them. Then based on the information asymmetry theory, public goods theory and risk management theory, the criticality of the supervision of third party payment is elaborated, concrete ideas about the establishment of third party payment supervision system in China are put forwards, and moreover, related supervision index and comprehensive assessment methods are designed. The research project is aimed at providing certain support and assistance for the development of third party payment and stable financial order in China.