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E-commerce Gets Banking Certificate in China
China's first national-level financial certificate of authority centre will give a strong boost to e-commerce and on-line banking applications by ensuring safe on-line trading and by integrating scattered on-line services into a systematic one, according to the China Daily.
Called the China Finance Certification Authority (CFCA), the centre was founded at the beginning of this month under the direction of the central bank -- the People's Bank of China -- with co-investments from 12 major commercial banks, including the Big Four State banks -- the Industrial and Commercial Bank of China, Bank of China, the China Construction Bank and the Agricultural Bank of China.
The centre will provide digital certificates to e-commerce and on-line banking users and providers to stave off cheating and hacker assaults, said Guan Zhensheng, CFCA general technology director, who had long worked in China Construction Bank's technology department.
Certification is an on-line identification card for Internet users to communicate, shop, and trade on line, he said. Without it, people can not believe in each other on the Internet, and the process of trading is full of danger.
"I once bought a book through the Internet. An on-line shop asked about my credit card number and password and took my money. I later thought it very dangerous: How could I ensure they would not take more money, and how could I defend my interest?'' said a consumer in Beijing.
"There is one bank that has launched on-line banking services that allows for e-commerce. It found out later that the business is fairly dangerous as the information can be easily obtained by hackers,'' Guan told China Daily in a recent interview.
Some banks which have entered on-line business have developed their own certificate of authority systems to ensure customers' identifications, but as Internet technologies makes big strides, their technologies have tended to become outdated, he told Business Weekly.
One bank's on-line banking operation can only provide 40-byte encryption technology to safeguard a user's information, which can be disencoded in several seconds, while the most advanced international technologies enable 128-byte encryption which takes several thousand years to disencode, he said.
Since banks acknowledge only its own certificate system, on-line cross-bank trading is impossible, he added.
The certificate of authority provided by the CFCA is the most authoritative in China and is recognized by all 12 member banks, he said.
It uses 128-byte encryption technology which ensures security of transmitted data which will not be repudiated by either side.
"No one can acquire the financial data of buyers engaged in trading, even sellers or the banks,'' said Guan.
He said the setting up such certificate of authority centres is an international practice that is key to the development of on-line banking, and the Chinese centre is one of the largest in the world in terms of its technologies and comprehensive functions.
The centre plans to issue 250,000 certificates this year, 120,000 of which will be given to individual users, said Guan.
Besides the 12 initial banks, more have shown an interest in participating in the system.
"Our aim is to unite all banks and integrate their secluded and scattered businesses,'' Guan told Business Weekly.
"I think it is wise for other banks to abandon their original systems and to participate in the new system as soon as possible,'' he said.
Since China's legal framework for e-commerce is still incomplete, the central bank has laid down a Finance Certification Policy and Management Direction to help settle disputes arising from on-line trading.
Following the direction, CFCA also mapped out a China Certification Procession Standard and Management Direction, which sets detailed operational rules guiding the sector, said Guan
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