“11.11” promotions of each year, Singles Day shopping festival, always see peaks in internet transactions, payments and logistics. In order to deal with such massive high-frequent transactions, new types of financial models, such as internet payment, financial cloud, consumer financial products and innovative insurances, provide strong support.
Distributed structure copes with payment peak
The peak of Alipay recorded 38,500 transactions per second for “11.11” promotions last year, and the figure this year is 2.23 times of last year to 85,900 transactions per second. The data shows that latest testing figure of Visa laboratory is 56,000 transactions per second, and such figure of MasterCard (another international payment clearing platform) laboratory is 40,000 transactions per second. In actual application, the peak of Visa is 14,000 transactions per second.
These massive high-frequent transactions are supported by financial cloud, Oceanbase database and distributed architecture, which are independently researched and developed by Alibaba Group Holding Limited (BABA.NYSE) and Art Financial Service Group. Art financial cloud is researched and developed based on special demands in financial industry, with functions of Aliyun Feitian 5K, and its distribution system can better cope with massive flow for “11.11” promotions.
Chen Li, chief technology officer of Art Financial Service, revealed that, in order to welcome the Tmall’s “11.11” promotions this year, over 200 banks cooperated with Alipay assessed and upgraded the payment capacity five months in advance, and carried out 470 pressure tests of 93 rounds to ensure the whole system can stably support the peak payments for “11.11” promotions. The system can support 85,900 transactions per second, and simultaneously remain a certain capacity.
Each pressure test was carried out at late nights or holidays in order not to influence normal use of clients, and technology teams of various banks usually worked overtime. Agricultural Bank of China Limited (ABC) (601288.SH) implemented seven rounds of pressure tests with obvious improvement each time, but ABC technology team said, “We still need capacity expansion and optimization, and will carry out next test.”
President of Postal Savings Bank of China even paid site visit to support pressure tests, and online payment capacity of the bank on Nov. 11 doubled when compared with 2014.
The UnionPay data shows that from 0:00 to 12:00 on Nov. 11, total transactions of consumer accounts through online UnionPay increased by nearly 50 percent year on year, transaction amount up by 15 percent year on year.
Chen indicated that great effort and coordination of banks make the Alipay platform double its transaction-dealing capacity yearly, and strongly support smooth payment experience for the promotions. Meanwhile, payment-dealing capacity of over 80,000 transactions per second also supports the online payment experience for the whole e-commerce industry.
Consumer financial products stimulated spending
Another characteristic of this year’s Singles Day shopping spree is the amazing performances of consumer financial products.
Within the first minute after the opening, Huabei had dealt with 520,000 payments, with one hundred percent success rate. This was the debut of Huabei on Singles Day. Facing over 80,000 instant payments per second, Huabei specially set up a team consisted of 70 members, which cover various departments such as product, technology and operation, to cope with any emergency.
During the first half hour, payments through Huabei amounted to 4.5 billion yuan, with one hundred percent success rate. In average, each payment cost only 0.035 seconds, which had effectively guaranteed smooth payment by consumers.
Spending potential had greatly lifted by consumer financial products. Chen Huaisheng, head of operations of Huabei, roughly estimated that Huabei could increase success payment rate by two to three percentage points. And the rise of one percentage point was equivalent to consumption of at least 130 million yuan.
On Nov. 11, the number of Jingdong IOUs users increased by 600 percent year on year. As at 4:00p.m. on Nov. 11, the proportion of payments through Jingdong IOUs in total transaction amount grew 500 percent year on year, with average sum of payment surpassed 800 yuan, and unit price by installments exceeded 1,500 yuan.
Transaction data showed that consumers inclined to pay for five merchandises through IOUs, which were mobile phones, tablet computers, cameras, luxuries and laptops. Specifically, 1 in 2.5 cellular phones and 1 in four laptops were paid through IOUs. JD Finance indicated that on Nov. 11, the unit price by installments was higher than previous and average market level.
Back freight insurance, which was first introduced in 2012, continued to enjoy popularity in this year’s Singles Day shopping festival. As at 12:00 at noon, there were 187 million orders with back freight insurance, which equaled to the total of the same day last year; as at 14:00, this number climbed to 208 million. Besides, MYbank under Ant Financial had devoted to design special Singles Day financing support scheme for Taobao and Tmall shops from as early as July this year. As at 23:00 on Nov. 10, MYbank had altogether granted loans of 9 billion yuan to over 100,000 Tmall and Taobao shops.
Ma Tao, senior analyst at Analysys, indicated that banks and insurance companies simply provided payment services for Singles Day shopping spree in the past years. But this year it was quite different, they began to join hands to provide overall financial support for the internet and the new economy.
Translated by Jelly Yi and Adam Zhang
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