enables online payments in Shanghai

Whilst the rest of the world ponders about online payments in the B2B world, China has finally closed the loop in the B2C world.

Payments for business to consumer (B2C) transactions over the internet in China are fast becoming a reality - at last. is working with The Shanghai Bankcard Network Service Center (SNET) to provide an online link between internet merchants and the Shanghainese members of the Golden Card national project.

The Golden Card Project was established in 1993, and its goal is to provide credit and debit and electronic banking services to China. Shanghai was a pioneer city and is touted as one of the premier Golden Card switch centers in China. The Shanghai network is called SNET and is an entity of the Shanghai Branch of the People's Bank of China (PBOC). To date, there are over 2,000 ATMs, 11,000 point of sale (POS) machines and over 20 million bankcards in its network. There are 11 local commercial banks in the SNET, plus Visa and MasterCard international and one foreign bank, Citibank.

For online merchants in China, only offline solutions were available for payments, usually in cash, or through multiple links with multiple banks.'s 1LinkPay system will enable the online merchant to "rent"'s software that will enable them to link to the SNET. These merchants will pay Rmb3,000 or HK$2,825 set-up fee, and Rmb3,000 per year thereafter in addition to 1% of the cost of the transaction. Payments will be confirmed in less than 30 seconds and merchants should receive their money after 24 to 48 hours.

Cheaper and easier

From a bank's perspective, why use "Because it is cheaper than developing payment software and facilities, which may not be a bank's core competency", says Sam Flemming, Strategic Alliance Manager of And what is in it for merchants? Online merchants can now accept payment from many different banks' credit and debit cards.

Usually, the crucial lynchpin for online payment companies offering such links between banks and financial institutions and web merchants is the co-operation of banks. Most of the larger banks are using proprietary online mechanisms for payment, or working together on collaborative models for a larger share of the market. has, with 1LinkPay, a gateway to China's largest electronic banking network and therefore the co-operation of local and state banks. The banks include PBOC, Industrial and Commercial Bank of China, Agriculture Bank of China, Bank of Communication, China Bank of Construction, China Everbright Bank, and Pudong Development Bank. But Citibank and the international credit cards that are part of SNET have yet to sign on with Flemming of cites legal and contractual reasons for the delay.

The other parties which need to come to play are online merchants and sites. has signed on only 5 websites to date, although each is said to be a key player in their respective industries.  The sites that have signed so far are (online auctioneers), (financial news provider), (interactive city guide), (retailer), and (insurers).

Flemming says that is concentrating on payments in the B2C e-commerce market place, but in the future will looking at expanding their solutions to the business to business (B2B) market place. China Ocean Shipping Company (COSCO) has already signed on to pilot's B2B program.
Golden Card members in Beijing can expect to be linked up in September, and Guangzhou and Shenzhen Golden Card members will be able to join in October.