The new battle field: an analysis of the payment systems in China

In recent years, the development of the Chinese financial system, has presented a fast changing spectrum to the rest of the world; this reform is still on going with new characteristics. Among other issues, the recent battle for the payment market is particularly interesting. This paper aims to examine the payment system; in particular the third party payment system, by illustrating the important market participants, analysing the basic infrastructures, defining the relevant conflicts and problems, and discussing the solutions. First, it studies the role of central banks, and the basic infrastructure of the Chinese payment system. Secondly, the non-financial-institution payment providers (as a group of the key players in the Chinese payment market) are analysed. Following this, the relevant law and regulatory regime is examined. In addition, the key problems of this system and further reform proposals are discussed.