Photo taken on Jan. 9, 2020 shows a list of merchants supporting Alipay payment in Vienna, Austria. (Xinhua/Guo Chen)
BEIJING, Sept. 17 (Xinhua) -- China's third-party payment market is experiencing a reshuffle, as more internet enterprises brace for the payment business.
Many third-party payment companies are eyeing business-end payment services.
Although cross-border payment is affected by the COVID-19 pandemic, it remains a promising market for third-party payment companies.
-- Fierce competition
China's third-party mobile payment market has been growing rapidly in recent years. The third-party mobile payment transactions in the country totaled 226.1 trillion yuan in 2019, according to statistics from iResearch, a Chinese provider of online audience measurement and consumer insights.
The gigantic demand is driving the restructure of the third-party payment market in China, where related enterprises compete fiercely.
So far, 200-odd third-party payment companies have obtained the permit to work on payment business. Of them, Alibaba's Alipay and Tencent's Tenpay continue dominating the market, with a combined market share of over 93 percent.
Leading Internet companies such as ByteDance, JD.com, Meituan Dianping, Didi, have started investing in payment business. For example, ByteDance, the parent company of TikTok, became eligible for the payment business after it acquired a payment business license holder from central China's Hubei Province.
Meanwhile, new payment companies like Joinpay, Vbill and 99bill are emerging, standing ready to fight in the payment business battlefield.
-- Opportunities from business-end market
Given the dominance of Alipay and Tenpay in the consumer-end payment segment, other payment service providers try to win a way out in the business-end payment industry.
Opportunities may lie in meeting the scenario-based needs of consumers in certain vertical industries, according to Wang Qifeng, CEO of Joinpay, a provider of Internet-based payment solutions.
For example, in the energy market, payment companies can join hands with SaaS providers to offer one-stop payment, financial management, staff management and other value-added digital services for gas stations, said Wang.
Opportunities also come with the rise of new payment formats and business modes under the impact of the COVID-19 pandemic.
Providing online value-added services to meet business-end demands may have a brilliant future, said Wang Yifeng, securities analyst with CITIC Securities. He pointed out that third-party payment companies can provide value-added services for merchants based on data collected from payment bills to understand their transaction flows.
-- Trend of cross-border payment
Boosted by the Belt and Road Initiative, RMB internationalization and consumption upgrading, cross-border e-commerce has been expanding over the past few years and driving the strong demands of upstream and downstream industries for cross-border payment.
With advantages including convenient cross-border payment procedures and flexible response to the diversified needs of sellers and platforms, third-party payment companies have surpassed banks and remittance companies to become the leading players in the area of cross-border payment services for retail e-commerce.
Zhou Ye, Chairman and CEO of the payment processing and account settlement service provider Huifu, said his company registered 46 percent growth in cross-border payment business in the first half of this year. He expected that the business would maintain double-digit growth in the coming years.
Although cross-border payment sector is affected by the slow-down of China's import and export and the contraction of cross-border e-commerce as well as airlines and tourism businesses due to the pandemic, cross-border payment offered by third-party companies will remain a new blue ocean market as overseas markets still have huge demands for business-end payment, according to Wang Yifeng.
In meeting overseas demands, experienced Chinese third-party companies can go global to foreign markets and provide local enterprises with payment services and solution packages. They can also cooperate with partners from home and abroad to provide whole-process solutions for buying from overseas, said Wang Yifeng. (Edited by Su Dan with Xinhua Silk Road, sudan@xinhua.org)
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