The recent PBOC annual Payments Industry Overview report shows plenty of impressive data and the main message that comes through is that "everything is growing". However, not all growth is the same and the numbers for credit cards industry are especially interesting.

February 18 2015

Happy New Year from Kapronasia!

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Happy year of the Ram from the entire team at Kapronasia!

We'll be taking a few days off, but will be back in the office next week. 

One of the latest ads from Huawei, the large Chinese manufacturer of networking equipment, is a rather disturbing wrapped up ballerina's foot. While the idea is good, the advertisement shows that there's still a gap in understanding between tech and the consumer. 

China’s capital markets are maturing. Futures and margin trading had already been launched, but this week we saw equity options for the first time in China. The new derivatives trading commenced with big fanfare, with main regulators as well as top government officials present at the opening ceremony, emphasizing the importance of the event.

2014 was a good year to be a bank in China, but apparently an even better one to be a brokerage. The latest data from the Securities Association of China shows that 2014 total income for the industry was 260.3 billion RMB (Chinese Yuan), up 63% from 2013.

Personal credit ratings in China have never been a pretty subject. Without a centralized credit database accessible to all, getting accurate credit information has proved challenging for any company in China providing loan products. With Ant Financial, the financial arm of Alibaba, launching Sesame Credit, we felt it was worth taking a second look at what might be happening here. 

The Singapore Exchange (SGX) has plans to launch a FTSE China A50 Index Futures option product if / when it is approved by the China Securities Regulatory Commission (CSRC). While the new product name can be confusing for those who don’t follow Asian stock and derivatives markets closely, it simply means that investors in the region will have a hedging tool for the rollercoaster stock markets of China. Up more than 40% since November last year, the stock market dipped several times in January. Since the Shanghai-Hong Kong Stock Connect launched, the attention on Chinese A-shares has been unprecedented and additional investor interest should drive demand for exposure and hedging tools.

January 30 2015

Payment Companies Struggle

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The total number of payments licenses currently stands at 269. Most of the licensed companies are private and do not disclose their financials, however, some publicly listed corporations have invested in the payment industry and a peek into their most recent annual reports allows us to know a bit more about the profitability of the payments industry in China. On one end of the spectrum, Alipay dominates the market and is very profitable. On the other, a prepaid-card company almost went bankrupt in January, which begs the question of how the industry is doing as a whole.

The explosion in margin lending has fueled a baseless rally in the Shanghai Composite, but the magnitude of leverage in the stock market is still coming to light.

A bit outside of our normal commentary, but an article sheds light on how low-latency technology is important in China, but for buying train tickets.

Based on a note from the People's Bank of China, China's personal credit scores may very soon be coming from the tech giants rather than any financial institution or credit data provider. On January 5th, the People's Bank of China (PBOC) sent out a note to eight non-banking institutions that they should "prepare for personal credit information operations" within 6 months. Although the note is a bit vague, the effort could indicate the end of what has been a continual problem with personal finance in China.

Some industry reports and rumors seem to indicate that the Chang Gou company's 'Chang-go' pre-paid payment cards are no longer usable. What does this mean for the industry?

According to data from Online Lending House, a China P2P industry data provider, as many as 92 P2P websites had issues in December 2014, significantly more than the 76 that had trouble in all of 2013, Some websites went offline temporarily, some products turned out to be fraudulent and some businesses were closed outright.

It's official. Although the bank has already technically been approved (several times), it seems like WeBank, 30% owned by Tencent, will finally make its big splash on January 18th.

Sneaking it in while the west was busy sipping eggnog and taking a break, the Chinese government has big plans for expanding the Shanghai Free Trade zone geographically. The new zone will include some of the most important real estate in Shanghai including the Lujiazui Financial disctrict.

Continuing along their international expansion strategy, China UnionPay launches Quickpass in South Korea. Could AndroidPay be next?

December 24 2014

Happy Holidays from Kapronasia!

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Happy holidays from the whole team at Kapronasia! We're off this week as well and will be back online January 5th. We're looking forward to an exciting 2015 kicking off with our annual 2015 Top-10 trends in fintech research Reports. Details soon and hope to have you there for the webinar!

December 12th, 12/12, or Double 12, was Alibaba's sequel to the highly successful Singles Day (November 11th). The difference this time though was the incredible focus on and success of the online-to-offline commerce push.

Alibaba is yet again launching another investment product, and this time it will give its Alipay customers the option to invest in gold.

This is part two of a two part series looking at China Unionpay's launch of Android Pay. Part one examined the potential impact of Android Pay on the mobile payment industry. Today we take a look at China Unionpay's business strategy in the mobile payments space as it launches Android Pay. We also answer the question of why China UnionPay would even be interested in having their own mobile payments app in the first place.

The new version of the popular Chinese payment app Alipay now supports Apple’s fingerprint touch sensor for account access and payment authorisation instead of a password.

On December 12th, Webank, the proposed bank from Tencent received regulatory approval to start operations. 

Conventional wisdom and the written history of capital markets would have it that the value of a particular stock is based on the potential of future returns in the form of dividends and the underlying book value of the company. Not ones to stick with tradition, China’s mainland investors have often defied this basic tenant of reason and developed their own ideas about what the price of any particular stock should be.

Alipay is making headway on its promises to expand globally and has now entered into an agreement with several foreign transportation card firms, which will allow Alipay users to buy transport service cards through the Alipay app as they travel abroad.

Kapronasia is pleased to release our P2P Lending in China report. Based on primary and secondary Comprehensive peer to peer lending reportresearch, the report is one of the most comprehensive reports on the development of Peer to Peer lending in China.

For more information on the report click here. 

This is part one of a two part series concerning China Unionpay's launch of Android Pay. Today we take a look at Android Pay's potential impact on the mobile payments industry. Part two will look at China Unionpay's business strategy within the mobile payments space as it launches an Android based mobile wallet.

The PBOC has announced it will be introducing a deposit insurance system in China, which will have a profound impact on banks’  behaviour.  Liberalizing the banking sector may put it on a more sustainable path but short-term risks should not be ignored.

The recent annoucement of the tie-up between GlobalCollect and China UnionPay tie-up could be a game changer for China UnionPay's international business.

After years of bearish sentiments among Chinese investors, the Shanghai Composite Index seems to be picking up again and rises to highest level since August 2011.

Alibaba's not so subtle move into China's financial services industry took another step forward today with an additional investment into financial data and software provider Hundsun.

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