How to Eliminate Illegal Secondary Clearing (二清) in Payment Platforms: A Complete Compliance Guide

What is “二清” (secondary clearing) and why it matters

“二清” refers to a second‑clearing settlement process where a platform re‑settles funds from its own account to merchants, which is a regulatory violation. The typical flow is shown in the first diagram.

Compliance solution overview

The core of compliance is that licensed institutions must manage funds, ensuring that funds are deposited into the account of the entity that owns them. The basic principle is illustrated in the second diagram: open sub‑accounts for each party so every transaction is accurately recorded.

Key components of a compliant solution

1. Network onboarding and account opening

Platforms sign cooperation agreements with solution providers, submit qualifications, and open various accounts such as regulatory accounts, fee accounts, and advance‑payment accounts. Sub‑accounts are created for users and merchants, and settlement cards are bound for recharge or withdrawal, using multi‑factor or small‑amount verification.

2. Fund account system

Institutions need both physical (real) accounts for actual fund management and virtual accounts for bookkeeping. Virtual account transactions represent ownership transfer without moving real money, as shown in the third diagram.

3. Account type hierarchy

Depending on business nodes, multiple account types are required: user sub‑account, merchant sub‑account, platform revenue account, and regulatory master account, as illustrated in the fourth diagram.

Regulatory master account: the main account opened by the institution for fund supervision.

Platform revenue account: records the portion of funds belonging to the platform.

Guarantee account: an intermediate account for funds pending settlement to merchants.

Pending settlement account: records funds awaiting settlement.

In‑transit account: records transaction amounts pending reconciliation.

User sub‑account: records each user’s payment amount.

Merchant sub‑account: records each merchant’s settlement amount.

4. Payment transaction

A compliant solution must provide collection, refund, merchant withdrawal, split‑payment, and inter‑account transfer capabilities. The platform may retain its original collection channels but must report transaction information to the regulator and aggregate funds into designated supervisory accounts, as shown in the fifth diagram.

5. Fund collection and settlement

Funds received via the regulator’s own channel or third‑party acquiring channel are aggregated and transferred to the designated supervisory account according to regulatory requirements, as illustrated in the sixth diagram.

6. Regulatory clearing

The regulator clears transactions on a T+1 basis. When the pending settlement account’s total amount is greater than or equal to the in‑transit account’s total for the day, clearing succeeds; otherwise, the process repeats until successful.

Platform transformation checklist

Integrating the above solution is similar to connecting a payment channel, but additionally requires onboarding, account opening, and split‑payment processing.

Payment system transformation: real‑time reporting of collection and refund operations to the regulator via payment APIs.

Settlement system setup: the settlement system calculates fees, while the split‑payment system calls the regulator’s split‑payment API; after a successful split, platform funds are recorded.

Accounting center transformation: open settlement accounts for merchants; the merchant’s virtual settlement account must map one‑to‑one with the regulator’s sub‑account.

Main interfaces and interactions

1) Account opening request

Submit merchant information to the regulator to open a secondary account and create a shadow account in the platform’s accounting center, as shown in the tenth diagram.

2) Split‑payment processing

Send a split‑payment request to the regulator; after receiving the result, the platform records the merchant’s settlement account, as illustrated in the twelfth diagram.

3) Withdrawal (outbound payment)

When a merchant initiates a withdrawal, the platform first deducts the amount from its virtual account, then requests the regulator to transfer funds to the merchant’s bound bank card, as shown in the fourteenth diagram.

Accounting processing examples

A ride‑hailing transaction example demonstrates collection, split‑payment, refund, and withdrawal flows, with detailed fund movements illustrated in diagrams 16‑22.