How China’s Internet Payment System Works From JD.com to the Central Bank

The article explains the complete payment chain in China by walking through a concrete example: buying Three Squirrels nuts on JD.com. It uses this scenario to illustrate how a transaction moves from the e‑commerce front‑end to the central bank.

Overall Payment Chain Overview

A typical Chinese internet payment flow involves the following steps:

The user selects an e‑commerce platform (e.g., JD.com) and browses products.

After choosing items, the user places an order, which redirects to the platform’s cashier page. The cashier aggregates multiple third‑party payment options such as JD Pay, WeChat Pay, and Cloud QuickPass; Alipay is not shown in this example.

These payment options connect to commercial bank payment channels, which forward the transaction to national clearing networks like UnionPay and NetUnion.

The final settlement reaches the People’s Bank of China, the top of the payment “food chain.”

Payment System Architecture

The architecture consists of several subsystems that together form the backbone of a service platform’s payment capabilities:

Cashier – the user‑facing page for selecting payment methods.

Order System – records business orders.

Transaction System – processes business‑initiated transaction requests.

Payment Core – handles payment instructions and interacts with payment channels.

Payment Channel Subsystem – transmits payment instructions to banks and clearing networks.

After a payment succeeds, a separate settlement line submits transaction data to a clearing center, then to an accounting system for bookkeeping, notifies the accounting core for internal records, and finally triggers the fund‑settlement platform to pay merchants.

Cashier

The cashier is the page where users choose a payment channel before completing a transaction. It provides a consistent payment experience across devices and supports two main scenarios:

Payment : Users pay for an order (e.g., buying a shirt on Tmall and being redirected to Alipay).

Recharge : Users top up their account balance via wallets such as Alipay, WeChat, or a merchant’s own wallet.

Transaction Core

The transaction system sits outside the payment core and translates business‑level transaction requests into payment orders that the payment core can process. For an escrow transaction, the flow is:

User’s payment succeeds, marking the transaction as “paid.”

After the user confirms receipt of goods, the transaction status changes to “completed.”

This illustrates how the payment system’s basic capabilities are packaged to support business‑level products.

Member System

The member system manages the identities of all participants within the payment platform. It stores unified member profiles identified by a member ID and maintains relationships between members, accounts, operators, and bank cards. Members are typically divided into:

Personal members (C‑end users).

Enterprise members (B‑end merchants) that may have settlement cycles, API permissions, and payment method configurations.

Payment Core

The payment core coordinates with downstream clearing, accounting, and settlement systems, allowing front‑end payment products to focus on business logic. Its responsibilities include:

Payment Service : Wraps backend payment interfaces and enables composite payments across multiple channels.

Payment Service Process : Defines atomic processes such as recharge, withdrawal, internal transfer, and refund, and orchestrates them.

Payment Command : Generates complete payment instructions containing all necessary information for subsequent processing.

Payment Protocol : Specifies product codes and payment codes that dictate processing flows, payment‑and‑receipt information, and channel details.

Accounting Core

The accounting core creates appropriate account types, manages accounts, records fund movements, and produces accounting data that reflects inter‑account transactions. It also reconciles its records with payment‑channel settlement data and handles any discrepancy transactions.

Clearing Core

The clearing core maintains clearing and settlement rules for each transaction and executes fund clearing and settlement according to the configured policies.

In summary, building a third‑party payment company in China typically requires dozens of interconnected systems; the payment process is far from simple.