2013-Chapter 2 Payment Services Abstract

Current Developments 

The most common mode of payment for online shopping is credit cards, followed by ATM (actual and web-based) fund transfers. Another very popular method is making payments at convenience stores to which the goods are shipped, which addresses both payment and delivery. This method also avoids nondelivery when the recipient is not at home and better protects the shopper's confidential information.
Other modes of payment employed by Internet shoppers include payments collected by logistics operators and information service providers. These are summarized as follows:

1.Online credit card purchase
2.Transfer by ATM card	ATM, WebATM, SmartPay debit card
3.Payment via convenience store	Direct cash payment
4.Cash on delivery	Payment by cash or credit card
5.Payment and collection via telecom bill	Mostly for digital consumer products
6.Payment and collection via information service providers
7.Cross-border payment and collection	Purchasing agencies and stored-value agencies

Cross-border payments 

Apart from Neweb Technologies, the only bank in Taiwan that has partnered with China's third-party payment service providers is E. Sun Bank, which launched a cross-Strait payment service with TenPay and Alipay on the mainland. This service allows mainland consumers to purchase products and services from Taiwan in renminbi. Taiwanese suppliers can then collect the payments in NT dollar from E. Sun Bank. On the other hand, the amount of goods and services purchased by Taiwanese consumers on online shopping sites from the mainland has been increasing rapidly. Recent reports in the press indicate that in 2012 Taiwanese consumers spent more than NT$40 billion at Taobao.com (a mainland shopping site). Transactions are realized through purchasing agencies, stored-value agencies.

Third-party online payment 

Third-party online payment has received considerable attention in 2013. The most talked-about third-party payment service providers are Alipay (China) and Paypal (U.S.). As these companies have enjoyed tremendous success, a number of Taiwanese corporations began to set up their third-party payment platforms in 2012 in an attempt to capture the market. The Financial Supervisory Commission (FSC) has defined third-party payments as "collections and payment transfers in the context of Internet transactions." In 2012 FSC began to allow banks to partner with platform operators to process credit card payments, while encouraging banks and platform operators to offer stored-value services. Consumers will then be able to apply for and set up a savings account via the Internet with proper identity authentication procedures. Consumers will receive different levels of consumption and stored-value account limits, depending on the method of authentication used. Stored-value payment account services offer another choice for domestic platform operators who would like to get into the stored-value business, with IC cards being the only option possible previously. This has opened up an entirely new form of online payments for Taiwan's online shopping industry.

Emerging modes of payment 

 There have been a growing number of new modes of payment, especially those associated with handheld devices, e.g. the PCI DSS standard defined by international payment card industry organizations (for credit card authorization), Square transaction processing, QR codes and sound wave mobile payments. However, those that deserve our attention are elements associated with new modes of cross-border payment, such as real-name authentication, cloud-based stored-value, mobile medium, and cross-sector partnerships. The focus of development for "emerging modes of payment" has expanded from e-commerce to O2O commerce. The nature of payment "instruments" have not changed in any significant manner, but a whole new experience has resulted from a variety of aspects such as application contexts, processes and human-machine interfaces.