Alibaba’s Single’s Day earlier this month was quietly a big test for China’s financial plumbing.
As Caixin points out today, China’s relatively new centralized payment clearing system saw the biggest jump in volume ever:
"When China’s central bank announced a plan to set up a new clearinghouse for online payments two years ago, many thought it was a 'mission impossible.'""However, after a little more than a year of operation, the clearinghouse managed to survive the online shopping orgy that takes place every Nov. 11 during Alibaba’s 'Double 11' sale.""NetsUnion Clearing Corp’s platform — which serves as the sole intermediary for the clearing of nonbank online transactions — handled 1.17 billion transactions across financial institutions on the day of the Double 11 sales, according to its website. At its peak, it handled 92,000 transactions per second."The benefits of a well-functioning centralized system are obvious:"Once the NetsUnion clearinghouse was up and running, payment companies and banks no longer had to make multiple arrangements for transactions with different partners, which helped them cut operating costs and reduce management risks."
Get smart: China has quietly made significant technical progress in how it manages the financial system. Those behind-the-scenes advances are often not well understood.
Caixin: How China’s New Online Payments Clearinghouse Survived ‘Double 11’