A Study On Internal Control System Of The Third-Party Payment Company

Considering the fast development of Internet-based transaction and the expansion of market of electronic commerce,payment institution also develops at a high speed.The third-party payment company help provide warranty for online transaction,resolving the credit problems of non-currency finance and breaking barriers of development of electronic commercial market.Meanwhile,online payment platform effectively reduces cost of funds circulation between financial institutions and users and lowers the investment of banks to provide such service.The third-party payment company face various risks during development.For instance,the risk of capital and currency,the risk of monetary,the risk of market and the risk of information disclosure are approaching and surrounding.According to fierce environment of payment companies,it is important to build inner structure.However,since payment institution has to deal with new mode of transaction and money transmission service,it has to face many different problems from bank and security company.In the present thesis,we first confirmed that many technical risks which derive from Internet-based transaction are approaching.We proposed that it is important for institutions to ensure the security of information during any transaction.Moreover,we pointed out that payment companies have to improve structure and policy for warranty of credit.Therefore,we analyze problems of inner structure,especially on payment institutions,in order to provide suggestions for establishment of internal control system.Firstly,this thesis review on the literatures about internal control systems and the third-party payment company.Comparing with bank and security companies,internal control systems is specifically important for the third-party payment companies with dynamic environment of payment institutions.In addition,we concluded and analyzed the environment of market and policies of third-party payment companies,and prioritized the internal control systems in organizational development.We conducted a case study on a third-party payment institution called company C.We followed the framework proposed by COSO to analyze internal environment,risk evaluation,control activity,information communication and supervision of company C.We found out that company lack of structure and experts of internal control to conduct rigid evaluation and control of risk.Considering Internet market of company C,information communication system and supervision systems should also be digitalized and updated in order to audit all transactions of money and other credits.Thereupon,we proposed recommendations for company C to improve internal control systems.First of all,it is priority to set up independent department and employ professional staffs to audit data of transactions and online credits.Faced upon risk of money and market,digitalized auditing systems and standardized process should be guaranteed by normalized policies.Moreover,effective information communication and efficient feedback system also help the company supervise control system and audit tremendous potential of risk.Based upon Internet,third-party payment company need to formalized internal control systems and customized to online market.Following previous suggestions,payment company could effectively improve audit and control activities with specific characteristic in online market.Therefore,third-party payment companies are able to develop persistently.