Abstract: One important base of internet financial is internet payments. When the regulatory authorities strengthen their efforts in regulation, the payment business income and the innovative business income of the payment institutions will be certainly affected, and their management cost and supervising cost will be increased, if they strictly obey the laws and regulations to manage the merchant risks. At the same time, the effects of the policies of local governments to develop local internet finance will be influenced. Therefore, while expanding the payment market business in an extensive manner, the best option for the payment agencies is to make more efforts to enter the internet financial market. However, in reality these behaviors may directly lead to the series of illegal operations of payment institutions, generate higher risks of money laundering vulnerabilities, and accumulate more financial risks. Thus, it is necessary to pay more attention to the business substance of the internet payment service agencies, to carry out functional regulation and risk supervision, and so on.

Key words: internet payment; financial risk; regulation design