The recent announcement that Canadian merchants will now accept UnionPay’s mobile QuickPass payment, along with Ingenico partnering with Alipay to provide mobile payments in Europe, highlight that huge strides are being made by both UnionPay and Alipay to infiltrate Western markets and that these efforts are being supported by the Western payments industry.

On Aug 12th 2016, the People’s Bank of China (PBOC) issued license extensions to the first group of companies in China to ever receive a third party payment license five years ago.  It was a long wait for the 27 firms. Their licenses, including those of industry giants Alipay and China UnionPay, had expired 78 days ago. 

Ant Finance, the most valuable Fintech startup in China, announced their plan to launch another payment app based on Virtual Reality (VR) technology. It will allow customers to make payments when they are using VR.

Over the past few months Alibaba's 'Finance Cloud' has gained significant traction with an estimated 40+ banks subscribing to some, if not all, of the services available on the financial platform. Far from just a cloud platform, Ali Finance Cloud is the closest we have seen to 'Bank in the Cloud.'

In July, China released the second draft of its Cyber Security Law, just a year after the release of the first draft. On one hand, many of the key terms listed will have to be better defined before it is possible to draw definite conclusions about the implications of the Law. On the other, it is already clear that the Law makes it harder for foreign technology companies to conduct business in China, and this will likely be the case for financial institutions too. Specifically, the second draft does that by expanding and blurring the scope of the regulation, giving authorities broader access to information systems and raising data localization requirements.

Assessing SME (Small and Medium Enterprise) credit has always been a difficult problem for banks and other financial institutions because lack of credit rating and reporting platforms. Last week, Sesame Credit announced the launch of their own credit checking and rating system for SMEs. They named it “Ling’Zhi” - which means “smart sesame” in Chinese. This new system may be the start of solving the SME credit issue and open up new funding channels to SMEs themselves.

At Lendit’s China conference in Shanghai this week, Kapronasia learned that Chinese digital payments giant Alipay is close to rolling out its new facial recognition software to the public. The lender – whose payments system holds about 48 percent of China’s online payments market share last year – has already made the feature available for employees, and plans to open it up to the public in the next few months, according to a source from Ant Financial. To pay with a selfie, Alipay users use a camera installed on the online payments platform to take a picture of themselves and the platform uses biometric methods to verify their identity. Ant Financial, which runs Alipay, is an affiliate of Hangzhou-based Alibaba Group Holdings.

Fintech companies in China are raising investor eyebrows this year, with such firms breaking global fund raising records. Even as the amount of venture capital flowing into China has slowed from its peak in 2015, data compiled by KPMG Enterprise and CB Insights show investors are still bullish on the fintech industry.  The money invested into China’s fintech sector reached a record high of $2.4 billion in the first quarter of the year, the consultancy said. This amount was boosted by deals into two of China’s so-called tech unicorns:  Chinese P2P lender Lu.com and JD Finance.

China is pushing its card industry towards tokenization as it seeks to make digital payments more secure on the Mainland. Banks and payment service providers (PSP) are required to use tokenization to process transaction data by the end of this year, according to Chinese business publication National Business Daily, citing a notice from China’s central bank.

Fintech in China started as 'internet finance' or 互联网金融. As the first real China fintech giants tended to come from internet finance platforms, like P2P lenders or financial distribution platforms, the name seemed to make sense, so the term 'fintech' was rarely used. However, today, we're seeing an interesting phenomenon in China as more firms are transforming their businesses to be more 'fintech focused', but what does that actually mean? Is fintech different than internet finance? And more importantly, why now?