15/05/2019 Research on Individual Reputation Management Based on Third-party Online Payment Mode Ping Song ,Yan Zhang, Qifeng Yang, Xuan Ma Wuhan University of Technology 15 May 2019 zhangyan

Structure Acknowledgement Research background Innovation points Method of Individual Reputation Management Technique Realization Conclusions 15 May 2019 zhangyan

Acknowledgement This research was supported by the Ministry of Educational of the People's Republic of China in Humanities and Social Science Planning Fund Projects: (1)Research on leading mode of online payment and its innovation service, under Grant 07JA630028. (2)Research on Online Payment Collaborative Management Mode , under Grant 08JA630064. 15 May 2019 zhangyan

15/05/2019 1. Research background Current phenomenon: ◆ in Taobao website, there are false transactions with capital flow but without logistics delivery in which sellers mutually collude with each other to brush their reputation rating. Existing individual reputation evaluated system: ◆ without setting up the feedback reliable factors and their own functions to deal with dishonest feedback and lack of incentives. buyer and seller start virtual accounts in third-party platform, who carries on the real-time management of individual reputation rating changes caused by delivering goods information of logistics center and virtual accounts changes for transaction’s occurring. New method: realizing technically collaboration of control information flow, capital flow and logistics based on reputation guarantee under third-party platform. 15 May 2019 zhangyan

2. Innovation points technically connecting establishing the reliable 15/05/2019 2. Innovation points technically connecting Individual reputation management center, logistics center with third- party platform by the Internet authentication establishing the reliable feedback factors and their own functions, to deal with dishonest feedback and lack of incentives. putting forward individual reputation management method and realizing the effective individual reputation management through database. 15 May 2019 zhangyan

3. Method of Individual Reputation Management setting feedback reliable factors, they are online transaction amount, guaranteed accounts stored on third-party payment platform, online praised rate, online complaining/ complained ratio and their functions Fig 2-1 The Basic Framework of Reputation Management under Third-party Online Payment 15 May 2019 zhangyan

After each transaction had ended, individual Ai and Bj submitted related reputation feedback rating of A and the B separately. Third-party online payment’s reputation management system collected all historical reputation rating of A and B through third-party platform open-door website, according to positive and negative feedback statistics, after incentive mechanism reward and punishment, compiled A’s and B’s reputation feedback, forming A’s and B’s initial reputation information, calculated A’s and B’s reputation through certain model as reputation information, compiled it to obtain the final reputation information. 15 May 2019 zhangyan

4. Technique Realization it connects the individual reputation management, logistics center with third-party platform through Internet identity authentication, achieving collaboration of individual reputation management, preventing buyers converting status for another transaction after the occurrence of identity fraud, also avoiding false transactions. 4.1 Topology Map of Individual Reputation Management 15 May 2019 zhangyan

4.2 Transaction Process of Individual Reputation Management it can be seen through(6)(7)(8), achieving the collaboration of control information flow, capital flow and logistics, avoiding the occurrence of fraudulent transactions with capital flow without logistics. Fig 3-2 Transaction Process of Individual Reputation Management under Third-party Online Payment Mode 15 May 2019 zhangyan

4.3. Micro-mechanism of Individual Reputation Management (1) The preparatory phase before transaction: In the commercial banks client, accounting entry is Debit: buyer’s bank deposit account M1 Credit: third-party bank account M1 third-party payment platform, client accounting entry is: Debit: third-party bank account M1 Credit: buyer virtual account m1 15 May 2019 zhangyan

(2) Transaction and payment stage: Debit : buyer virtual account M1 Credit: third-party exchange account m1 Reputation rating management: the buyer increased points for CB=CB+k1(M1- m1). After the buyer’s acceptance of purchasing goods or service, informing third-party payment platform of their satisfaction with the goods or service , then deciding the flow of fund. This process is second settlement. 15 May 2019 zhangyan

① When buyer is satisfied with the goods or service, the accounting entry is: Debit: third-party exchanging account m1       Credit: seller virtual account m1 Reputation rating management: the seller increased points for CS= CS+k2m1, the buyer increased points for CB=CB+k3m1. ② When buyer is not satisfied with the goods or service, third-party platform will hedge funds received. Accounting entry is: Credit: buyer virtual account m1 Reputation rating management: the seller deducted points for CS= CS –k2m1, the buyer deducted points for CB= CB –k3m1. 15 May 2019 zhangyan

4.4. Database Table Design (1) User Registration Information table (2) Main File of Buyer’s Account table (3) Main File of Seller’s Account table (4) Order Details table (5) Trading Water table (6) The Financial Account Stated table (7) Temporary table (8) Red Word Hedge table 15 May 2019 zhangyan

(1) The buyer browses the goods selected on the website, and negotiates a good price with the seller. The buyer send merchandise information to the seller through his own account, the seller determines the order information, giving the buyer order number; (2) The buyer sends the order information and account number to third-party platform, and transfers goods payment to the virtual account in the third-party platform, then sends payment instructions and recording current account, the transaction serial number, account number , buyer’s points CB and so on. it realizes the first settlement; 15 May 2019 zhangyan

(4) Recording account stated; (3) According to the transaction flow, modifying the balance of the main file of buyer’s account, reducing m; (4) Recording account stated; (5) Temporary table registering transaction. Temporary table of a transaction generates two records, which are third-party platform and the seller respectively; (6) Secondary settlement. modifying reputation rating of buyer and seller, recording buyer points CB and seller points CS.; (7) Recording seller’s account stated according to main file of seller’s account table. 15 May 2019 zhangyan

5. Conclusions (1) According to difference of each factor impacting on the individual reputation level, various incentive functions are established. Each third-party platform sets reward and punishment coefficient based on its actual situation, enhancing the operation, scientific and flexible reputation management. 15 May 2019 zhangyan

(2) Individual reputation management method is proposed, which realizes collaboration of control information flow, capital flow and logistics under third-party online payment mode technically, and effectively prevents these illegal transactions in which the sellers collude mutually to do business with only capital flows but not logistics delivery which is prevalent in Taobao website to enhance their reputation. 15 May 2019 zhangyan

(3) For buyers, with improvement of third-party online payment environment, more online users are attracted. Buyers and sellers make transactions by the online payment, making transactions faster and safer. So each buyer’s utilities are higher, realizing network’s externality of online payment. 15 May 2019 zhangyan

Thanks for your attention！ I appreciate if you can give me more advice！ 15 May 2019 zhangyan