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Online payment solution in China by

3rd party payment landscape in China by L'Atelier

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Page 1: 3rd party payment landscape in China by L'Atelier

Online payment solution in Chinaby

Page 2: 3rd party payment landscape in China by L'Atelier

Summary

• Payment Gateway vs Third Party Payment

• Stakeholders of Payment Gateway in Asia

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2

Page 3: 3rd party payment landscape in China by L'Atelier

Payment Gateway vs

Third Party Payment1

Page 4: 3rd party payment landscape in China by L'Atelier

Payment Gateway vs. Third Party Payment

What is a Third Party Payment

lower setup fees

fixed monthly

costs

charge a higher

discount rate (as much as

5.5%).

cheaper for very small business

(<$5000/ month)

• A Third Party Processor does not require its merchants to obtain a merchant account, so they are able to start processing transactions much quicker

• The initial costs may seem cheaper

• The fees which are charged are higher

• Less expensive in the short term and that is why so many new online businesses choose to start with some of them like PayPal.

• Their name shows up on the customer’s credit card bill

• They are responsible fraudulent transactions

Page 5: 3rd party payment landscape in China by L'Atelier

Example of fees(PayPal)

TRANSACTION FEE FOR ONLINE PAYMENTS

(based on monthly sales)PayPal fees

$0 to $3,000 2.9% + $0.30 per transaction

$3,001+ to $10,000 2.5% + $0.30 per transaction

$10,001 to $100,000 2.2% + $0.30 per transaction

$100,001+ 2.2% + $0.30 per transaction

Deal Flow Rate Term of service

0 - 60k 1.20% 1 year

60 - 500k 1.00% 1 year

500k – 1M 0.90% 1 year

1M – 2M 0.80% 1 year

2M - X 0.70% 1 year

Example of feesAlipay

Payment Gateway vs. Third Party Payment

What is a Third Party Payment

Page 6: 3rd party payment landscape in China by L'Atelier

How Third Party Payment Works(escrow)

Buyer pays with Alipay

Alipay tells the merchant that the

money is here

Merchant delivers the product

Payment is released after buyer confirms delivery

1 2

3

4

Payment Gateway vs. Third Party Payment

What is a Third Party Payment

MerchantConsumer

3rd PP

Page 7: 3rd party payment landscape in China by L'Atelier

• E-commerce application who provides the interface between your website/computer and your Merchant Account Provider, with a direct integration.

• The equivalent of a physical point of sale terminal located in most retail outlets.

• Payment gateways protect credit card details by encrypting sensitive information, such as credit card numbers

higher setup fees

monthly and

up-front costs

lower discount and per-

transaction rate

Cheaper for bigger business

(>$5000/Month)

Payment Gateway vs. Third Party Payment

What is a Payment Gateway

Page 8: 3rd party payment landscape in China by L'Atelier

Example of fees(Eway - Australia)

Annual Fees Eway fees

$399(5free transactions/month)

$0.60 per transaction

$799(200 free transactions/month)

$0.40 per transaction

$1499(400free transactions/month)

$0.22 per transaction

Payment Gateway vs. Third Party Payment

What is a Payment Gateway

Page 9: 3rd party payment landscape in China by L'Atelier

How Payment Gateway Working

User places order

Merchant’s Web Server

Payment Gateway

BankMerchant

Request payment Gateway

Request to Bank

BankResponse

Money paid to Merchant

Payment GatewayResponse

Server Response

Payment Gateway vs. Third Party Payment

What is a Payment Gateway

Page 10: 3rd party payment landscape in China by L'Atelier

Stakeholders of Payment Gateway in China

2

Page 11: 3rd party payment landscape in China by L'Atelier

Payment Gateway vs. Third Party Payment

Stakeholders of Payment Gateway in China

Page 12: 3rd party payment landscape in China by L'Atelier

Payment Gateway vs. Third Party Payment

Stakeholders of Payment Gateway in Asia

Global

Page 13: 3rd party payment landscape in China by L'Atelier

Alipay

Payment Gateway vs. Third Party Payment

Stakeholders of Payment Gateway in Asia

Alipay

• China’s leading third-party online payment solution

• More than 550 million registered users

• 8.5 million transactions daily.

• Provides an escrow payment service

• Provides payment solutions for Taobao and Alibaba.com, and more than 500,000 external merchants for online retail, virtual gaming, digital communications, commercial services, air ticketing and utilities fee payment transactions.

• Partners with more than 65 financial institutions, including 19 leading national and 45 regional banks across China, as well as Visa and MasterCard.

• Facilitates offline value-added services through a strategic partnership with China Post, which has coverage of rural areas and university campuses.

Page 14: 3rd party payment landscape in China by L'Atelier

Alipay

Payment Gateway vs. Third Party Payment

Stakeholders of Payment Gateway in Asia

Alipay

Deal Flow Rate Term of service

0 - 60k 1.20% 1 year

60 - 500k 1.00% 1 year

500k – 1M 0.90% 1 year

1M – 2M 0.80% 1 year

2M - X 0.70% 1 year

Prepayment Deal flow Term of service

¥600 60k1 year

¥1,800 200k1 year

¥3,600 450k1 year

Deal flowrates

Subscriptionrates

Page 15: 3rd party payment landscape in China by L'Atelier

Tenpay

Payment Gateway vs. Third Party Payment

Stakeholders of Payment Gateway in Asia

Tenpay

• The website must be located in mainland China and your site shall be filed with the authority

• The main competitor of Alipay.

• Developed by Tencent which owns the most popular IM in China – QQ with more than 300 million users.

• More than 200,000 shopping websites accept Tenpay.

• Compatible with the e-banking service of major domestic bank.

• Users can use Tenpay to send payment/ Receive payment• Withdraw money to bank account.

• Use to charge mobile, deposit money to game account, and buy air ticket.

• Provides an excellent payment platform to corporate users, covering B2B, B2C and C2C areas.

Page 16: 3rd party payment landscape in China by L'Atelier

Tenpay

Payment Gateway vs. Third Party Payment

Stakeholders of Payment Gateway in Asia

TenpayPrepayment Deal flow

Fee Rate of Excess Part

Term of service

Suitable Commercial

Clients(Average monthly trade

volume)

¥480 50k 1% 1year <¥5,000

¥1,680 200k 1% 1year <¥20,000

¥3,750 500k 1% 1year <¥50,000

¥7,000 1m 1% 1year <¥100,000

¥12,000 2m 1% 1year <¥200,000

¥25,000 5m 1% 1year <¥400,000

¥45,000 10m 1% 1year >¥500,000

Page 17: 3rd party payment landscape in China by L'Atelier

99Bill

Payment Gateway vs. Third Party Payment

Stakeholders of Payment Gateway in Asia

• The website must be located in mainland China and your site shall be filed with the authority.

• Has over 80 banking or financial institutions with over 300 access points.

• Has over 1.1 million merchant partners that span 20 industries, including travel business, insurance, online shopping, logistics, clothing and education.

• First to provide these merchant partners with innovative services like no-card credit card payment, large-amount online payment support and IVR voice payment.

Page 18: 3rd party payment landscape in China by L'Atelier

99Bill

Payment Gateway vs. Third Party Payment

Stakeholders of Payment Gateway in Asia

Payment category Register or not Fee/Rate

Bank card payment No 1%(0.01yuan minmum)

99bill account payment Yes 1%(0.01yuan minmum)

Telephone bank payment

No1%(0.01yuan minmum)

Offline payment No ¥1 each

Page 19: 3rd party payment landscape in China by L'Atelier

China UnionPay

Payment Gateway vs. Third Party Payment

Stakeholders of Payment Gateway in Asia

• The only bankcard organization in China. Three in ten cards worldwide are a Union Pay Card

• English gateway

• 48h approval

• No China entity required

• No china bank account required

• Flat low service rate.

Page 20: 3rd party payment landscape in China by L'Atelier

China UnionPay

Payment Gateway vs. Third Party Payment

Stakeholders of Payment Gateway in Asia

Merchant Location China

Discount Rate Rates from 0.7%

Activation Fee $250.00

Monthly Account Fee $25.00 USD per month

Transaction Fee From 5 cents USD per transaction

Rolling Reserve 2% of gross volume*

Payment Currency ¥ CNY (RMB)

Settlement Currency ¥ CNY (RMB)

Settlement Timeframe From every 2 days

Cards Accepted Chinese debit cards and credit cards

Integration Method Hosted sales page (https post) / Various

Page 21: 3rd party payment landscape in China by L'Atelier

China PNR

Payment Gateway vs. Third Party Payment

Stakeholders of Payment Gateway in Asia

• Set up in shanghai in 2006

• Its founder was the former high level executive from China UnionPay

• Focus on financial payment and industrial chain Payment

•Specialized in Financial Fund, airline travel, and gaming industries

Page 22: 3rd party payment landscape in China by L'Atelier

Yeepay

Payment Gateway vs. Third Party Payment

Stakeholders of Payment Gateway in Asia

YeePay Advantages• All-In-One Total Solutions for Online, Mobile, Telephone, POS.• Value-Added Services including Financial & Marketing Tools.• Customized Vertical Solutions for Industry Specific Applications.

Products & Services• Online Payment (Gateway & Virtual Account/e-Wallet)• Mobile Payment (Flexible Billing: In-App, Pay-Per-Play, Subscription)• Telephone Payment (Call Center-based Solution)• Point-of-Sale Terminal Payment (Retail)• Multi-card support: Bank Cards (Debit/Credit) + Universal Prepaid Cards• B2C, B2B, C2C Support• Credit Payment Service

Major Verticals• Online Shopping (eCommerce)• Digital Entertainment (Gaming)• Air & Travel• Telecom & Mobile• Education• Insurance• Logistics

Certification/Membershipe-Payment License(Issued by People’s Bank of China)Member of China Payment and Clearing AssociationNational Information Security CertificationPayment Card Industry Security StandardsISO/IEC 27001:2005

Page 23: 3rd party payment landscape in China by L'Atelier

Yeepay

Payment Gateway vs. Third Party Payment

Stakeholders of Payment Gateway in Asia

Payment category Fee/Rate

Online payment 1%

Easyown rechargeable phone card

1%

Jcard 1%

Page 24: 3rd party payment landscape in China by L'Atelier

L’Atelier Management Consulting (Shanghai) Ltd.Cloud Nine Plaza, 9/F 1118, West Yan'an Road | 200052 Shanghai | ChinaT 86 21 62 81 85 33 | www.atelier.net | [email protected]