After WeChat Pay, Alipay also announced the progress of its work with UnionPay Cloud Flash Interconnection on October 2. According to the announcement, Alipay and China UnionPay have realized mutual recognition of collection codes in Beijing, Tianjin, Guangzhou, Shenzhen, Chengdu, Chongqing, Xi'an and other cities across the country, and plan to cover all cities across the country in March next year. In addition, 85% of Taobao stores already support consumers to pay through cloud flash payment.

"the interconnection between Alipay, WeChat Pay and Cloud Flash is actually divided into two levels, one is the mutual recognition between bar code payments, and the other is the opening of payment links between the Internet platform ecosystem." A person in the payment industry told the reporter that this move may only be a pebble for the current stable pattern of the payment industry, and the effect is unknown, but it is worth noting that behind it is the huge wave of anti-monopoly in the platform economy.

Two payment giants promote interconnection with Cloud Flash pay

On Oct. 2, Alipay announced through its official Wechat account that it was cooperating with China UnionPay to promote online and offline multi-scene payment interconnection under the principle of security and order. The following progress has been made:

1. Open online scenes to UnionPay Cloud Flash pay, covering 85% of Taobao merchants in the first batch.

In August this year, Alipay completed the research and development of the technology to access UnionPay Cloud flash payment, and gradually opened up the online payment scene. The first open transaction scenario is the Taobao platform, where 85% of the stores already support consumers to pay through cloud flash payment. Users who install Cloud Flash APP can choose "Cloud Flash" payment directly at the Alipay cashier after submitting an order on Taobao shopping.

2. Alipay and Cloud Flash scan mutual recognition

Alipay and China UnionPay began to communicate and explore closely based on bar code interconnection service in 2020, and gradually promote it after the completion of pilot verification at the end of 2020. At present, mutual recognition of collection codes has been achieved in Beijing, Tianjin, Guangzhou, Shenzhen, Chengdu, Chongqing, Xi'an and other cities across the country, and it is planned to cover all cities in the country in March next year.

In addition, Alipay and UnionPay jointly promoted the opening and cooperation of 23 banks and institutions, including ICBC, CCB, Bank of China, Bank of Communications, China Merchants Bank, CITIC, etc., and supported the payment function of Cloud Flash APP and various banks and institutions APP scanning Alipay collection codes.

"the two sides will continue to explore the introduction of commercial bank APP, mobile Pay and other payment methods to provide users with more diversified and convenient payment services." Alipay said.

Not long ago, WeChat Pay announced that they had officially realized offline bar code mutual recognition and mutual scanning with UnionPay Cloud Flash App, and users could scan Wechat collection codes in provincial capitals across the country to complete payment.

At the same time, focusing on "service interconnection", Cloud Flash App has fully supported the top-up services of Q coins, QQ Music and Tencent videos; WeChat Mini Programs will gradually support cloud flash payments, and the first batch of Mini Program online, including Wechat Reading, Tencent videos, Maoyan, JD.com, BBK, Ruixing and other Mini Program scenarios, this capability has started grayscale testing on Sept. 22. When users recharge or pay through the above Mini Program, they can choose WeChat Pay or Cloud Flash as the payment method.

Who is good for payment tools to break down barriers?

Chinese reporters from brokerages have learned that as early as 2018, regulators and industry agencies have discussed the possibility of payment interconnection. In 2019, the central bank issued the Financial Technology (FinTech) Development Plan (2019-2021), reiterating the requirement of bar code payment interconnection.

"Mutual recognition of payment instruments has always been the direction that regulators want to promote, not the result of market-driven." Kou Xiangtao, chief commentator of payment encyclopedia, said that the main reason for regulators to promote payment interconnection is that the current electronic payment market coverage is nearly saturated, the pattern of payment services is solidified, and the strong are Hengqiang, squeezing the healthy development of small and medium-sized institutions in the industry, while bank wallets are also gradually marginalized.

Looking back at the development of the third-party payment industry, since the rise of WeChat Pay after a Spring Festival "red packet war" in 2013, the payment industry has gradually formed a duo pattern of "dichotomy between Alipay and WeChat Pay". Juxtaposing the QR codes of the two institutions has gradually become standard for domestic merchants.

"it makes a lot of sense if you can connect to each other." Kou Xiangtao said that merchants do not need multiple payment acceptance equipment, which can reduce the investment of multi-brands into the network and save the exhibition cost of the payment industry, which will give the payment products of small and medium-sized institutions more opportunities to compete and gain more room for development.

Many interviewees compared the interconnection between the two payment giants and Cloud Flash to the former gold card project, that is, the interconnection of bank card collection business. In the 1980s and 1990s, swiping a credit card became a fashionable new way of payment. Each card issuing bank has its own POS machine. The common expression "which bank do you swipe your card from" is similar to the later "do you swipe Alipay or Wechat".

However, with the promotion of credit cards by banks, there are more and more POS machines on the cashier. Until 1993, the State Council launched the "Golden Card Project", which required the sharing of resources such as POS and ATM and the improvement of the card environment. In March 2002, the central bank approved the establishment of a joint bank card organization, China UnionPay, which unified the business rules and technical standards of bank cards and thoroughly realized the interconnection of bank card receipts. At the same time, it has also brought about a hundred flowers blooming and balanced development of the bank card business of large banks and small and medium-sized banks.

However, there are also views that, compared with small and medium-sized payment institutions, the biggest beneficiary of bar code payment mutual recognition is Cloud Flash, followed by Internet enterprises and some large banks, such as JD.com, which already have a large number of online payment customers. "the current pattern of the payment industry is very difficult to break, even under the influence of bar code mutual recognition, user stickiness, merchant direct connection and other factors, the advantage of small and medium-sized payment institutions is not obvious." "on the contrary, Internet companies with a customer base and banks with retail advantages may get the opportunity to develop offline micro-payments," said a person in the payment industry. "

Mutually exclusive platforms are merging.

"the interconnection between Alipay, WeChat Pay and Cloud Flash is actually divided into two levels, one is the mutual recognition between bar code payments, and the other is the opening of payment links between the Internet platform ecosystem." The aforementioned people in the payment industry told reporters. The latter is also the more eye-catching part of the two announcements, that is, Alipay and WeChat Pay are gradually opening up online business scenes to Cloud Flash pay.

In September this year, another piece of news about payment interconnection also attracted market attention. Some users found that BABA's ele.me, koala sea purchase and other APP payment pages provide WeChat Pay this option.

Before that, more and more large Internet platforms began to access a variety of payment methods. For example, Meituan has supported WeChat Pay, Alipay, Cloud Flash pay, Meituan pay and so on.

Among the business models of many Internet platforms, payment is not only a key to complete the ecological closed loop and accumulate user data, but also an infrastructure for the development of other financial services. The goal of Internet giants' continuous efforts is to keep users and data in their own solid ecological fortress after the closed loop is completed, so as to dominate the output or retention of these resources.

If the payment link is opened and other payment methods are introduced, it means that the relatively closed or even mutually exclusive platform ecosystem between the giants in the past is opening a gap.

There may also be regulatory impetus behind this. Recently, regulators have spoken out many times on how to open up the mode of payment. On September 24, Fan Yifei, deputy governor of the people's Bank of China, said at the 10th China payment settlement Forum that anti-monopoly in the payment field needs to be deepened. Specifically, to focus on fair competition and promote platform enterprises to open payment interfaces in an orderly manner, we should not only consider a certain institution, but should be really open to all payment institutions, and exclusive and discriminatory payment agreements are strictly prohibited.

On September 14, central bank governor Yi Gang also publicly pointed out that the winner-take-all attribute of large financial technology companies may lead to market monopoly and reduce the efficiency of innovation. "against this background, Chinese regulators are also trying to balance the relationship between encouraging development and preventing risks." He said that these include strengthening anti-monopoly, issuing guidelines on "anti-monopoly in the field of platform economy", promoting the opening and closure of large Internet platform enterprises, and fully protecting consumers' right to pay.

However, at present, it is still difficult to fully realize the opening of the payment link. "the difficulty in promoting interconnection does not lie in technology, but in the game between benefit distribution and all parties." Said one payment industry analyst.

Judging from the previous gold card project, large banks that have invested a lot of resources to lay out bank card receipt networks are the least willing to achieve interconnection, because this is equivalent to allowing small and medium-sized banks to use their resources directly. "Today, as two mobile payment giants, Alipay and WeChat Pay once burned a lot of money to become winners in the competition, and it is difficult for them to give up their resources easily." The extent to which payment interconnection will be carried out remains to be seen, the person said.