The payment system is composed of intermediary agencies providing payment and settlement services as well as professional and technical means to realize the transmission of payment instructions and the settlement of funds. It is used to realize the settlement of creditor's rights and debts and the transfer of funds, which is sometimes called the clearing system.
The payment system consists of the following seven elements:
1. Customers: electronic transactions with enterprises or enterprises of units or individuals by means of electronic transactions. Businesses choose to purchase goods, use their own payment tools for payment.
2. Merchant: an individual or unit that provides goods and services to customers. When a customer issues a payment order, he or she must ask the financial institution for settlement.
3. Certification Center: it is a third-party intermediary organization, which is responsible for the stability and security of the transaction process.
4. Payment gateway: it is the server to protect the internal network security of the bank. When electronic payment is made, it must be processed by the payment gateway before it can enter the payment and settlement system within the bank.
5. Customer bank: also known as card issuing bank, it is a bank that provides capital account and online payment tools for customers.
6. Commercial Bank: also known as receiving bank, it is a bank that provides capital account for merchants.
7. Financial network: This is a special network to protect the security of information exchange within and between banks.