The participants in the offline acquiring industry chain include: third-party professional service organizations, cardholders, special merchants, card issuers, bank card organizations, and acquirers.
The following are some of the major players in the industry chain from the perspective of profit model and mutual position: China UnionPay, third-party professional acquirers, acquiring outsourcing service agencies, card issuers and acquiring banks.
I. China UnionPay
background
UnionPay has no controlling shareholders and no actual controllers. Its shareholders are mainly state-owned banks, joint-stock commercial banks and local financial institutions. At present, UnionPay has a total of 152 shareholders, the largest single shareholder is China Banknote Printing and Minting Corporation, and its shareholding ratio is only 4.86%. Followed by the five major banks of industry, agriculture, China, construction and trade, except for CCB holding 4.78%, the other four major banks are 3.84%. The top six shareholders share a total of 25%.
The positioning of UnionPay has always been unique. It is currently the only bank card organization in China and the only transaction clearing provider for RMB payment cards. At the same time, it has the role of industry supervision, but its subsidiaries also provide services such as payment and receipt. Market participants.
UnionPay has more than a dozen subsidiaries, the most important of which are UnionPay International, UnionPay Business, UnionPay Data Services, UnionPay Electronic Payment, Bank Card Testing Center and CICC Financial Certification Center.
Among them, UnionPay is mainly engaged in bank card receipt and professional services, which is also the “third-party professional acquirer†in the above picture.
Business profit
At present, China UnionPay's operating income structure is mainly: first, domestic ATM income, such as handling fees collected in cross-bank withdrawals; second, domestic POS transaction transfer income, that is, the commission portion of credit card merchants; third, international business income; four are some Innovate business revenue, such as mobile payments. Among them, domestic POS revenue accounts for about half of the revenue of UnionPay.
UnionPay and third party payment
In 2004-2010, UnionPay and third-party payment companies each developed at a high speed. The former is mainly offline, and the latter is in the online market.
In 2011-2013, due to business pressure, this situation began to change and the two sides began a confrontation.
In the past year, relevant authorities have frequently issued articles trying to downplay the monopoly position of UnionPay in the domestic market.
In the near future, UnionPay cited nine violations of the three major items in the payment acceptance market, including more than 100 banks and more than 40 non-gold institutions. However, the third-party payment institution believes that the violations mentioned in the article do exist, but from the perspective of the positioning of the UnionPay and the marketization of payment, some of the statements and practices of UnionPay are not reasonable. On the other hand, the chaos in the acquiring market does require supervision.
Faced with the pressure of third-party payment institutions, UnionPay also began to transform its previous business model. At the beginning of March 2014, the president of China UnionPay, Wen Wenchao, said in an open forum that “the days when UnionPay lays down to earn money are gone foreverâ€, also known as “China UnionPay wants to embrace the market and sincerely participate in market participation. Deep and comprehensive cooperation... I am a platform. Everyone is welcome to come over and use my platform to provide development opportunities for every customer through the operation of China UnionPay platform."
Second, third-party payment companies
Third-party professional acquirers are what we usually call third-party payment companies.
The acquiring institution refers to a financial institution that has been approved by the regulatory authorities (People's Bank, China Banking Regulatory Commission), operates bank card business, engages in UnionPay card transactions, contracts with special merchants, promises to pay for the acceptance of UnionPay card transactions, and has the qualification for bank card receipt. (Bank) and a qualified professional organization that serves the special store.
The acquiring institutions can be divided into two categories:
Financial institutions with acquiring qualifications are currently all banks, including 247 commercial banks, 70 rural commercial banks and 119 rural banks.
Non-financial institutions with acquiring qualifications, at present, a total of 62 non-financial companies have acquired the qualifications for acquiring. For example, Alipay, UnionPay Business, Tenpay, Quick Money, La Cala, and so on.
Profit model
1 Income from handling fees. For a long time, the acquiring business of the bank card acceptance business '721' (the credit card processing fee is divided according to the ratio of the issuing bank, the acquiring institution, and the UnionPay 7:2:1), the third party acquiring agency extracts two Cheng is the income.
2 Interest income generated by depositing funds. In fact, this part of the income is not the main source of income for the company, it can basically offset the payment between the company and the bank.
The tangible direct income of the payment company mainly comes from the above two, but the most important intangible asset is actually the third "user". It contains the user who paid the product itself, and the user's information. Users who pay for products are often users with a large amount of real information, and the value of these transactions generated by these users through the payment platform cannot be estimated.
status quo
At present, there are more and more acquiring institutions and fierce competition. The price wars for expanding the enclosures have resulted in a meager profit from fee income, coupled with the relatively high operating costs of traditional acquiring, which have led to traditional acquisitions to some extent. Business profits are relatively low or even loss.
Third-party payment companies and banks, although they all do the acquiring business, in fact, their starting point is not the same. To a large extent, the customers and services provided by third-party payment companies are unwilling to do.
For example, in the acquiring business, the fee income only accounts for a small part of the bank, and the settlement of the merchant's settlement funds is the main purpose of the bank to carry out the acquiring business. Third-party payment companies cannot use this deposit fund, and only banks with bank licenses can use the deposited funds to conduct business.
Under the current situation that traditional acquiring profits are becoming more difficult and the profit model is single, more and more third-party payment companies are trying to enter the segment:
1 On the basis of payment, superimpose high-value-added services such as marketing and financial services, such as financial services in the industrial chain, and provide financing services to merchants and individuals in the industrial chain system through cooperation with banks.
2 The biggest advantage and asset of the third-party payment company is the customer data. With the customer transaction record, business situation, capital flow, etc., and using the big data and cloud computing analysis system to digitize the user credit and data, the payment company has formed. A closed loop of transaction data for capital flows and information flows within the system. After mastering the data of users, merchants and enterprises, the payment company began to explore the value of the core advantages of payment, and develop value-added services such as precision marketing, balance management, financial credit risk control and supply chain finance. In the future, data analysis and value-added services based on the channelization of acquiring orders will become the main profit points.
3 Mobile payment explosive growth, the development of innovative payment products, such as the recent hot m-POS.
For third-party acquirers that are late to the market, competition is particularly cruel. The acquiring industry is an industry that is labor intensive and dependent on economies of scale. If you want to dig deep into the market and follow the rules to earn a fee, the market chaos is obviously unfair to them. As for the big data concept, the user base must be huge to cover the marginal cost, and it cannot be achieved by small and medium-sized acquirers.
Third, the outsourcing service agency
The contracting outsourcing service institution refers to an enterprise that has been approved by the administrative department for industry and commerce to accept the entrustment of the UnionPay card acquiring institution to provide non-core business services for the UnionPay card acquiring institution, independent operation and self-financing.
Incoming non-core business: including but not limited to merchant expansion and service, terminal deployment and maintenance, and transaction access.
Merchant expansion and service refers to screening and contacting new UnionPay card merchants in accordance with the requirements and requirements of the acquiring institution and China UnionPay; or providing special merchant training, return visit inspection and other services in accordance with the requirements and requirements of the acquiring institution and China UnionPay .
Terminal deployment and maintenance refers to the deployment of ATM, CDM, multimedia self-service terminals, POS, fixed telephone and other bank card acceptance terminals, providing daily maintenance and repair, supply replacement, application update, parameter adjustment and other services.
The transaction access service refers to the collection of transaction information initiated by various payment terminals such as ATM, CDM, multimedia self-service terminals, POS, fixed telephone, mobile phone, and the Internet, and the customization and forwarding of transaction messages.
If the acquiring and outsourcing service agency is entrusted by the acquiring institution and intends to carry out the transaction access service, it can directly access the China UnionPay system, but it must pass the UnionPay certification before access. Currently, there are 53 companies that have passed the UnionPay certification.
background
In order to reduce labor costs and optimize enterprise resource allocation, some acquirers outsourced their business to third-party service organizations, which led to the development of the bank card acquiring service outsourcing service market.
The outsourcing of bank card receipts is also a kind of service outsourcing. The main body of the business will outsource the non-core business with no advantage to the specialized service organization. The best external professional team will do the result, which is the result of market division and refinement. It is also a business model for improving efficiency.
Profit model
According to the “Management Measures for UnionPay Cards Outsourcing Service Organizations†of UnionPay, the outsourcing service agency and the acquiring institution jointly agree on the charging method, and may not charge the merchants the fees related to the entrusted business.
4. Card issuer and acquiring bank
The main function of the card issuer is to issue various bank cards to the cardholders and charge a fee by providing various related bank card services. At home, there are no non-bank card issuers.
An acquiring bank is a bank that redeems cash in an inter-bank transaction or contracts with a merchant to settle an interbank transaction fund and directly or indirectly transfer the transaction.
When the issuing bank and the acquiring act are the same bank, the transaction does not go through the UnionPay trading network, which is called the current generation of the receipt; when the issuing bank and the acquiring act are different banks, the transaction must go through the UnionPay exchange network, which is called the current generation of his receipt. .
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