NetsUnion Clearing Corporation (NUCC) (网联清算有限公司) is the operator of China’s nationwide centralised platform for the processing of online transactions undertaken by the country’s third party payments providers involving bank accounts.
NetsUnion was established by the Payment and Clearing Association of China (PCAC) (中国支付清算协会) and is subject to the supervision and regulation of the People’s Bank of China (PBOC).
The company has registered capital of 2 billion yuan.and is 37% owned by 7 subordinate entities of PBOC including China National Clearing Center (中国人民银行清算总中心), Shanghai Clearing House (上海清算所) and Shanghai Gold Exchange (上海黄金交易所).
Chinese payment giants Alipay and Tenpay also each hold equity stakes of 9.61% in Netsunion.
NetsUnion is responsible for operating China’s Non-bank Payment Organisation Internet Payments and Clearing Platform (非银行支付机构网络支付清算平台), which is the nationwide platform for the settlement of transactions by third party payments providers involving bank accounts.
NetsUnion is responsible solely for operation of the platform, and does not directly provide any payments services itself.
Since 30 June 2018 NetsUnion has been responsible for the centralised processing of all transactions by China’s third party payments providers involving bank accounts, in a move that has severed direct ties between payments companies and banks.
The platform was established by PCAC and commenced operation in March 2017.
In August 2017 PBOC issued the “Notice on Non-bank Payment Organization Network Payment Operations Shifting from the Direct Model to China NetsUnion Platform Handling” (关于将非银行支付机构网络支付业务由直连模式迁移至网联平台处理的通知).
The Notice mandated that from 30 June 2018 any online payment operations undertaken by third party payments providers involving bank accounts must be processed by NetsUnion, and that providers must connect to the platform by 15 October 2017.
The Chinese government subsequently sought to expedite the incorporation of third party payment providers into the centralised platform, with PBOC issuing the “Notice Concerning Relevant Work Arrangements for the Incorporation of Non-bank Payment Organisation Online Payment and Settlement Platform Channels” (关于非银行支付机构网络支付清算平台渠道接入工作相关事宜) on 20 March 2018.
China’s Third Party Payments Providers Will Sever Direct Ties to Banks