How Banks Integrate with the NetUnion Platform After Direct‑Connect Termination

1. Who Is NetUnion?

NetUnion, the "Non‑Bank Payment Institution Network Payment Clearing Platform," was created to replace the risky multi‑direct‑connect model where dozens of payment institutions each connected directly to hundreds of banks, leading to duplicated interfaces, fragmented reserve accounts, and regulatory blind spots.

The platform aims to provide a unified, public clearing service that centralises funds, improves transparency, and brings reserve‑fund supervision under the central bank.

2. Significance of NetUnion

NetUnion standardises the online‑payment market, enhances transaction transparency and security, and offers a centralised clearing service that strengthens reserve‑fund oversight, protecting customer assets.

By reducing operational costs for payment institutions and improving efficiency, it creates a fairer, more transparent market environment.

3. Shift in Integration Paradigm

Before the "cut‑direct‑connect" policy, each payment institution had to integrate individually with every bank, creating a complex network with inconsistent standards and opaque reserve‑fund management.

After the policy, both payment institutions and banks connect uniformly to NetUnion, which handles transaction routing, clearing, and places reserve‑funds under central‑bank supervision.

4. NetUnion Payment Services

4.1 Quick Pay

Quick Pay allows users who have bound a bank card to a payment‑institution app or website to make payments without re‑entering card details each time.

Typical scenarios include e‑commerce purchases on platforms like Taobao using Alipay.

4.2 Payment (Outbound) Business

Outbound payment covers wallet‑to‑bank withdrawals, merchant settlement, and credit‑card repayment scenarios.

4.3 Collection (Agency)

Agency collection authorises the collection institution to debit the payer’s account according to agreed frequency and amount, eliminating per‑transaction confirmations.

Example: recurring electricity‑bill deductions via WeChat.

4.4 Gateway Pay

Gateway pay redirects users from a payment‑institution page to the bank’s H5 gateway for final payment confirmation.

4.5 Refund

Refund reverses completed transactions (quick pay, collection, gateway pay) and returns funds to the original bank account.

5. Bank‑Side Payment System Architecture

The bank‑side system is typically divided into four layers: Application Service, Common Service, Communication Front‑End, and Infrastructure.

5.1 Overall Architecture

Application Service Layer implements transaction‑type‑specific services that are independent and can be scaled according to performance or business needs.

Common Service Layer provides reusable components such as protocol management (signing, querying), limit checks, risk control, and anti‑money‑laundering services.

Communication Front‑End Layer handles message signing/verification, encryption, message assembly/disassembly, and format conversion, adhering to NetUnion’s XML specifications.

Infrastructure Layer supplies databases, message queues, caches, configuration management, and scheduling according to each bank’s technical stack.

5.2 Quick Pay Process in Bank System

The flow includes transaction information registration, quick‑pay protocol verification, limit deduction, and final settlement. High‑traffic events (e.g., Double‑11) require performance optimisation and minimal external calls.

5.3 Outbound Payment Process

Key steps are transaction registration and account‑information validation, with different handling for debit cards, credit cards, and corporate accounts.

5.4 Gateway Pay Process

Users are redirected to the bank’s gateway page where they complete authentication (password, token, biometric, etc.). This model is mainly used by enterprise users due to its higher security requirements.

5.5 Refund Process

The process registers transaction information, loads the original transaction, verifies the refund request, and ensures that cumulative refund amounts do not exceed the original payment.

5.6 Reconciliation

Reconciliation aligns transaction data among the bank payment system, the bank core system, and NetUnion, using both summary and detailed files to detect mismatches and generate exception reports for correction.

6. Summary

Bank‑side payment systems are built around NetUnion’s supported functions, combining layered architecture, strict protocol enforcement, and robust reconciliation to achieve high scalability, fault tolerance, and performance for various transaction types.