| China's payment and clearing system has two sets of systems
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When you go to ATM to withdraw money, you use the central bank's CNAPS (China Modern Payment and Settlement System)
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When you use Alipay to buy, buy and buy, you use a third-party payment clearing system
Here is the first part: CNAPS
| What does the bank do when you withdraw money at the ATM?
Let us first take an example of ATM withdrawal to illustrate the process of inter-bank business.
If you take an ICBC card to a CCB ATM and withdraw 100 yuan, then inter-bank business has occurred.
The process is very simple:
The CCB system told the ICBC system that there is an ICBC user who wants to withdraw 100 yuan from me. Can you let him withdraw it?
ICBC said that his ICBC account is enough to deduct 100 yuan, so please give it to me first!
CCB ATM will spit out 100 yuan to you;
As a result, you get cash and your ICBC account is reduced by 100 yuan. For you, the entire transaction is over. However, CCB first gave you 100 yuan on behalf of ICBC, which formed an inter-bank debt relationship: ICBC owed CCB 100 yuan. When and how to pay the 100 yuan, although it is a matter between the banks, but only when the 100 yuan is paid off, the bank will treat the transaction as a real end. It can be seen that a bank's inter-bank withdrawal can be divided into two steps: payment and clearing.
| Payment and settlement are information flow and capital flow
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Fonseca from your ATM to spit out money, a process known as payment (Payment).
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ICBC returned 100 yuan to CCB. This process is called clearing .
Payment reflects the information flow of the transaction, which is generally real-time. When you withdraw money at the ATM of CCB, ICBC only makes a record in its internal account, and ICBC's funds have not decreased. However, actual fund transfers must occur between CCB and ICBC to repay the creditor's rights and debts, so the liquidation reflects the flow of funds in the transaction. Banks can clear once a day or at intervals, but in most cases, the clearing is not real-time.
Almost all business activities in modern society will eventually produce transactions. All transactions, except for the exchange of goods, are ultimately reflected in the transfer of funds between bank accounts. Therefore, a country's Payment and Clearing System is the most basic project . This system involves two issues:
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How is the flow of information transmitted—that is, how does the communication between CCB and ICBC communicate?
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How to liquidate the flow of funds—that is, when and in what manner will ICBC return 100 yuan to CCB?
The solution to these two problems is the CNAPS (China Modern Payment and Settlement System) that we are going to introduce . CNAPS evolved gradually. Before this plan came out, in order to solve the problem of information flow and capital flow, we experienced ancient ticket numbers, modern manual inter-bank systems, and electronic inter-bank systems EIS. So before introducing CNAPS, let us go back to ancient times and see how the ancients used ticket numbers and escorts to solve these two problems.
| The evolution of CNAPS
1. Shanxi merchants' ticket numbers and escorts
As early as the Qing Daoguang (1823) years, merchants in Pingyao, Shanxi, founded the "Rishengchang" and other bill numbers that specialize in remittance business (ancient bill numbers and banks are the prototypes of modern banks). The famous red-top businessman Hu Xueyan started his business as a ticket number business.
The ticket number at that time supports the remote remittance business:
The customer comes to Shengchang to remit money, and after the payment is made, the draft number will be issued to the customer. Like the bank, the ticket number also has a total number and a semicolon. Customers can bring the money order or send the ticket to their relatives. As long as the ticket is presented, the bank can redeem money at the semicolon of Rishengchang nationwide, and the semicolon will be recorded first after the customer has exchanged it. Internal accounts, and then settle debts with the head office in the future.
Since then, merchants can trade between cities without carrying large amounts of silver. The circulation of bills of exchange between the various semicolons in different cities has also formed a lot of debts. There is a large amount of money that needs to be turned over. The escort specializes in transporting money for bill numbers and transporting bills for merchants. It is a bit similar to the current threat of banknotes. Leopard, but the escort fee is as high as 5%!
During this period, the information flow and capital flow are as follows:
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The bill of exchange + account book (manual accounting) is the information carrier of the bill number in the payment link, which solves the problem of information flow;
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The Escort transported funds for the ticket number and solved the problem of capital flow.
2. Joint Bank Letters and Post Office
After the emergence of modern banks, a set of settlement methods based on "interbank positions" began among banks.
We extract a piece of clearing science on the Internet:
Since the old Rothschild opened up the exchange of bank notes between different banks two hundred years ago, the inter-bank clearing business has continued to the present. At that time, the old Rothschild della brought a group of silver shopkeepers to discuss with them, "From now on, my customers can come to your house to pick up gold coins with my silver bill, and then you can take the silver bill to my house to pick up gold coins in return. I also allow your customers to come to my house to withdraw gold coins." From this time on, it marked the beginning of the universal deposit and exchange business of modern banks. Since most of the two customers have crossovers, there are not many gold coins that actually need to be withdrawn from each other: for example, your customer withdraws 1,000 gold coins from me, and my customer withdraws 800 gold coins from you, and then our two compare the accounts. Both sides agree, you give me another 200 gold coins. Once the bank notes are exchanged, the accounts of both of us are cleared. This process is called liquidation, and the process of comparing the accounts is reconciliation.
This piece of science describes the business principles of inter-bank deposit and withdrawal, and there are some details that need to be explained:
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Bank A is afraid that after bank B's customers withdraw money from A here, B will not accept the account. Therefore, for the sake of insurance, banks will ask the other bank to open an account first and deposit a portion of the money as a reserve, or a deposit reserve . This reserve account is an inter-bank position account specially used for clearing;
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A bank needs to open an account in all banks in order to realize universal deposit and withdrawal;
Obviously, our domestic banks also refer to this set to implement inter-bank transactions, and banks have opened reserve accounts with each other. At this time, each bank is a clearing agency, clearing funds between banks.
Until 1984, after the People's Bank of China specifically performed the functions of the central bank, our country established a statutory deposit reserve system. The central bank's reserve fund system was formally established. At this time, there are two options for bank inter-bank fund clearing :
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Use the old method to open clearing accounts in all banks that you have contacts with.
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All financial institutions open clearing accounts with the central bank, and the central bank conducts unified clearing for commercial banks
Obviously everyone wants to use the second option. However, in that era, the responsibilities that the central bank could undertake were very limited. The internal data of various banks had not been centralized, there was no electronic accounting system, there were no bank cards in China, and there were no ATMs full of streets when customers wanted to transfer money. In a word, the domestic financial environment has not yet reached the objective conditions for the central bank to implement a unified national settlement system .
In order to meet the needs of inter-bank settlement, the central bank proposed at that time that commercial banks should "self-contained inter-bank systems, inter-bank direct exchanges, mutual reporting and transfer of cards, and timely settlement of funds." That is to say, the head office and branches of the same bank are called "joint bank system" . The settlement of funds within the same bank is done by the head office of the bank. In this way, the settlement of funds between the Shenzhen branch of CCB and the Beijing branch of CCB will be settled internally by CCB itself. Direct remittances must be supported across banks. Inter-bank business can be cleared by the central bank or commercial banks themselves. This period when the various banking systems are very unintelligent and poor in experience is called the "National Manual Banking" period.
As a result, each bank can accept inter-bank remittances. The bank adjusts the balance by itself every day. After various transactions are summarized and calculated, the transaction information that needs to be notified to other banks is written in a specific official document, stamped and sent between the banks. go with. This kind of official document is called a joint bank letter , and sending and receiving joint bank letters was an important business of the post office at that time.
It can be said that until 1990, my country's payment and settlement system did not have much improvement compared with the ticket numbers of the Ming and Qing Dynasties. Manual billing of bills of exchange and account books is still the bank's information carrier in the payment link, which solves the problem of information flow. The post and telecommunications bureau replaced the Escort, sending and receiving inter-bank letters for banks, but the efficiency was still not high, and the funds were in transit for more than a week. As for the problem of capital flow, it is resolved by the commercial banks' self-settlement and the central bank's unified settlement.
3. The predecessor of China's payment and settlement system-EIS (1989-2005)
1) Completion of the clearing center
With the continuous development of the banking industry, the number of banks dealing with various types of inter-bank business has increased every day, and the debt-to-debt relationship between banks has become very complicated, and it has become very difficult for each bank to net the balance on its own to conduct liquidation. This situation requires the central bank to assume the role of a national clearing center.
Therefore, on December 6, 1989, the Central Bank issued the "Notice on Reforming the Interbank Liquidation System."
Then in 1990, the People's Bank of China clearing center was built to provide payment and clearing services for financial institutions. This clearing center includes NPC and CCPC:
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NPC (National Process Center, National Financial Clearing Center)
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CCPC (City Clearing Processing Center)
2) The National Electronic Union Banking System EIS was put into production
On April 1, 1991, the application system based on the financial satellite communication network-the National Electronic Interbank System (EIS) began trial operation. EIS is a system specially used by the People's Bank for handling funds clearing and fund transfers in different places (including inter-bank and intra-bank) funds. It connects commercial banks, central banks, NPC and CCPC.
3) EIS business process
Assuming that a customer remits money from Shenzhen Construction Bank to Beijing ICBC, the process of processing an inter-bank remittance through EIS is as follows:
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After receiving the remittance request from its customer, the commercial bank (remittance bank) submits the payment instruction (transfer list) to the local branch of the People's Bank of China (issuer). The payment instruction can be a paper certificate, or magnetic medium information, or an online electronic message;
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After the issuing bank debits the remittance bank account, the payment information is classified and packaged according to the receiving bank, and sent to the general clearing center via CCPC via the satellite ground station. If the account balance of the remitting bank is insufficient, the payment instruction must wait in line until the balance of the remitting bank is sufficient for deduction;
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The general clearing center receives the transfer telegram, records it and clears the payment instructions according to the PBC's receipt and reporting branch, and then sends it to the corresponding receiving bank immediately via the satellite link;
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After the receiving bank credits the importing bank's account, it will notify the importing bank in the form of a generated paper voucher or electronic message;
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After the inbound bank has processed the accounts, it sends a confirmation reply message to the outbound bank in the opposite direction of the account to complete the remittance process;
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After the head office and sub-centers check the correctness every day, the electronic joint bank accounts of the day will be smoothed to reflect the fund relationship with deposit and borrowing. That is to say, the balance of funds deposits and debts in various places is reflected in the People's Bank of China.
In this inter-bank remittance process, the financial satellite communication network and EIS system solved the information flow problem ; NPC and CCPC solved the capital flow problem . Since then, inter-bank remittances between various banks can be completed directly through such electronic operations, and the time for customers' funds in transit has been shortened to one or two days. This is also a major milestone in China's financial system.
4. Central Bank Payment and Clearing System (CNAPS)
After the trial operation of EIS in 1991, two major events occurred:
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The core systems of major banks were put into production
The internal networking systems of various commercial banks have been completed and put into production, and the internal capital transfer of the banks can be solved through their own core systems. This means that all major banks can do electronic intra-bank clearing, and there is no need to rely on EIS for intra-bank transfers between different places.
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China Modern Payment System (CNAPS) began to design
In October 1991, China began to build China National Financial Communication Network (CNFN) and China National Automatic Payment System (CNAPS). This project was loaned by the World Bank, and the design consulting work was undertaken by the British PA Consulting Company. Since then, the National Electronic Union Bank (EIS) system has gradually transitioned to CNAPS.
In the 21st century, with the rapid development of IT technology, the central bank's CNAPS generation system (large and small payment system) has also begun to enter the stage of history. China's payment and settlement has entered the era of modern payment system CNAPS.
| Small amount payment system
In 2002, the Central Bank's large-value real-time payment system (HVPS) was put into operation to process large-value credit operations between commercial banks in the same city and different places (including those of a certain amount in the bank).
In 2005, the Central Bank's Small Batch Payment System (BEPS) was put into operation to process the debit payment business with the interception of paper vouchers in the same city and in different places and the small credit payment business with an amount of less than 50,000 each.
Simply put, inter-bank transfers between banks can be done using the central bank's large and small system.
There are quite a few differences between large and small systems :
First of all, the opening hours of large and small amounts are different :
The large-value system is 8:30 ~ 17:00 on weekdays, so on holidays, banks often receive notifications that certain services are suspended because the central bank maintains the large-value system on holidays. The small amount system is open all year round and works 7*24 hours.
The business process is different :
Large amounts are sent in real time and cleared in real time for every transaction, so basically it can arrive in real time, with zero inter-bank funds in transit.
The small amount system collects a number of transactions and then packs a package for unified processing, and clears them regularly. Therefore, it often takes a few minutes or even half an hour to transfer funds using the small-value system, and inter-bank position delivery is also non-real-time.
Although in theory, the inter-bank transfer business, regardless of whether it uses large or small amounts, can generally arrive within a few minutes, but because it has to go through the central bank, during this period, basically no banks dare to promise customers how long the funds will arrive.
Different amounts :
There is no amount limit for the large-sum system, and the upper limit of a single amount supported by the small-sum system is 50,000 yuan.
In terms of usage, the large-amount system focuses on the timeliness of fund transfer, and is mainly used for capital market, money market transactions, and large-amount trade fund settlement. Small value systems have higher requirements for data throughput, and are mainly used for small-value trade payments and personal consumption services.
| Super Online Banking
On October 6, 2013, the central bank's second-generation payment system was officially put into operation, including the online payment inter-bank clearing system (commonly known as "Super Online Banking") launched in 2010. Super online banking is a supplement to the large and small payment system, with two highlights:
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Access institutions are no longer limited to banks . Third-party payments such as Alipay and Tenpay can also be accessed. Therefore, some third-party payments provide merchants with modern delivery functions based on super online banking.
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The bill will arrive in real time 7*24 hours, and the single limit is 50,000 yuan . This is equivalent to adding a channel with the characteristics of a large-value payment system during non-working days and non-business hours. It's just that the amount limit is consistent with the small amount system.
| Various channels of the bank
With the large and small amount system and super online banking, the inter-bank business of the bank is interesting. The bank has established different channels for different customer groups and different scenarios . Probably the ones we contact most frequently are bank counters, mobile internet banking, POS machines and ATM machines.
For various business purposes, different channels of business use different clearing systems to achieve inter-bank transactions. It is roughly as follows:
Bank counter : directly use the large and small amount system;
Mobile Internet Banking : Large and Small Amount System + Super Internet Banking;
ATM : The information flow is processed by UnionPay, that is, UnionPay CUPS provides the transfer and clearing of instructions for inter-bank transactions; the capital flow is completed by UnionPay through the large-value system to complete the inter-bank fund transfer;
POS : Similar to ATM, UnionPay processes the information flow. However, the capital flow is divided into two parts. The transfer of funds between the issuing bank and the acquiring bank is completed by UnionPay through the large-value system; the transfer of funds between the acquiring bank and the merchant account is completed by the UnionPay through the small-value system.
1. Mobile Internet Banking
Mobile internet banking has become a popular channel in recent years. For example, in the inter-bank transfer of CCB mobile banking, we can see that there are two ways: normal and expedited.
Normal and expedited transfer page:
Looking at the account arrival time description in the picture above (this copy is also drunk), we know that ordinary inter-bank transfers are based on the large and small amount system, and the super online banking is urgently used.
Currently, most mobile phone online banking inter-bank transfers have no handling fees. So if you want to transfer 100,000 yuan across banks at 10 o'clock in the evening, it is recommended that you divide it into two 50,000 yuan and transfer the money in an expedited manner.
2. POS machine swipe card
There are many parties involved in POS machine swiping. Take your credit card at Starbucks as an example:
Cardholder-you
Card issuing bank-the bank where you have this card, we assume it is ICBC
Merchant-Starbucks, we assume that the Starbucks account is opened with CCB
Acquiring bank-the bank of the Starbucks credit card machine, assuming it is also CCB
Transfer agency-UnionPay
Clearing institutions-UnionPay and the People's Bank of China
Therefore, when you use an ICBC card to spend at Starbucks, the capital flow and cash flow are like this:
You swipe your card on the POS machine of the acquiring bank (CCB) for consumption (information flow)
CCB sends consumer messages to UnionPay (information flow)
The UnionPay transaction system records transaction data and sends consumption messages to your card issuing bank (ICBC) (information flow)
ICBC deducts fees from your card in real time, completes real-time settlement, and responds to UnionPay (fund flow)
UnionPay updates the transaction data and responds to the POS machine of CCB (information flow)
UnionPay completes clearing in its clearing system (information flow)
Through the large-value payment system, UnionPay completes the transfer of funds between the ICBC and CCB clearing accounts (inter-bank clearing) (funds flow)
UnionPay completes the fund transfer (acquisition and settlement) (funding flow) between the CCB and Starbucks settlement accounts through the micropayment system or the local bill exchange system
In this process, UnionPay provides two types of liquidation:
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The liquidation of CCB and ICBC is called "inter-bank liquidation" ;
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The clearing between the CCB accounts of CCB and Starbucks is called "acquisition clearing" ;
Regardless of inter-bank clearing or acquiring clearing, UnionPay is a franchised participant of CNAPS, using a large and small payment clearing system to complete the fund transfer for bank card business. Essentially, UnionPay provides transaction transfer, clearing and reconciliation, and the People's Bank of China provides settlement.
3. ATM inter-bank withdrawal
ATM inter-bank withdrawals are similar to POS machines, because no merchants are involved, so there is no need for acquiring and clearing, and the process is simpler.
Going back to the example at the beginning of the article: You took an ICBC card to the ATM of CCB and took 100 yuan. The process of this inter-bank business in the CNAPS system is as follows:
You enter 100 yuan on the CCB ATM and press the withdrawal button (information flow)
CCB sends message information to UnionPay (information flow)
The UnionPay transaction system records transaction data and sends the message to your card issuing bank (ICBC) (information flow)
ICBC deducts fees from your card in real time, completes real-time settlement, and responds to UnionPay (fund flow)
UnionPay updates transaction data and responds to CCB ATM (information flow)
UnionPay completes clearing in its clearing system (information flow)
Through the large-value payment system, UnionPay completes the transfer of funds between the ICBC and CCB clearing accounts (inter-bank clearing) (funds flow)
| Summary
This is probably the content that CNAPS is more relevant to ordinary users. As for the various content that we don't usually touch, such as China Securities Depository and foreign exchange, I will skip it for the time being. Let's review it with a PPT of the People's Walk:
Note: This picture does not include Super Online Banking
Simply put, in the CNAPS system, commercial banks
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Intra-bank transactions
The information flow and capital flow problems are solved by each bank's internal business system;
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Cross-bank transaction processing by channels
Through channels such as counter and online banking, commercial banks directly connect to the central bank's large and small amounts and super online banking to solve the problem of information flow and capital flow;
For ATM and POS channels, UnionPay’s CUPS is used to connect major commercial banks for payment transfer to solve the information flow problem; UnionPay also provides clearing and reconciliation services, and then the central bank’s large- and small-amount system is called to resolve the funds after reconciliation. Flow problem
| FAQ
After learning about CNAPS, I finally know why many fund operations cannot be done during the holidays when the central bank system is upgraded.
1) Why is the central bank's system upgrade, and inter-bank transfer through online banking is not possible?
Answer: Because online banking transfers between banks, the central bank's large and small amount system and super online banking are required.
2) Why are ATM and POS machines not affected by the upgrade of the central bank's system?
Answer: Even when the large and small payment system is closed (such as the Spring Festival upgrade), it will not affect POS's inter-bank card swiping and ATM inter-bank withdrawal, because these transactions only involve information flow and can be transferred in real time through UnionPay CUPS . The fund transfer process involving actual fund flow can be delayed.
3) Why is the central bank's system upgrade, and some P2P companies can no longer withdraw their cash?
Answer: P2P company withdrawals are mostly realized through the agency service of third-party payment companies. Some of the third-party payment agency services are also realized by relying on the size of the central bank and super online banking. Therefore, the central bank system upgrade may also affect P2P.
4) Why can we still recharge Alipay when the central bank system is upgraded?
Answer: Most of the recharge business of payment companies is realized by separately developing quick payment interfaces with many banks, so recharge is not affected by the central bank system, but will be affected by the maintenance of a specific bank's quick payment interface.
| Glossary
NPC Clearing Center-National Processing Center
CCPC Clearing Center-National Provincial Capital and Shenzhen City Processing Center
CNAPS China Modern Payment System
EIS National Electronic Union Bank System
CNFN China National Financial Network
HVPS Central Bank Large Amount Real-time Payment System
BEPS Central Bank Small Batch Payment System
CUPS China UnionPay bank card inter-bank payment system
Position : The English equivalent of a position is position, which refers to a position, which can also be said to be an asset stock. The People's Bank of China keeps accounts for commercial banks. A bank's funds with the central bank are called positions. The bank treasurer's management of positions is to manage the liquidity of funds and avoid idle funds.
Payment : Payment takes place between the payer, the payee, and the bank where the account is opened. If the payer’s book balance decreases, and the payee’s book balance increases, payment is made;
Sorting : Sorting is a process in which the paying bank and the beneficiary bank exchange payment information, and calculate the difference between the borrower and the lender according to the payment instructions; if it is a POS machine, the sorting is done by UnionPay;
Settlement : Settlement involves the bank and central bank of the payer's beneficiary, who use the central bank to transfer the reserve account to settle the creditor's rights and debts.