Third Party Payment: Extensions Issued After Long Wait

Written by Felix Yang || August 18 2016

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. 

Virtual Reality Pay: Alipay in the VR world?

Written by Felix Yang || August 17 2016

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.

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.

The PBOC and CUP push for tokenization in China

Written by Denis Suslov || July 14 2016

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.

Ant Financial to Buy 20% Stake in Thailand's Ascend Money

Written by Denis Suslov || June 20 2016

Ant Financial will purchase 20 percent of Thai payments and online finance provider Ascend Money, with the right to increase its stake to 30 percent, China's Ministry of Commerce said in a statement on its website. 

Will a potential Taobao and UnionPay collaboration actually work?

Written by Kaiyu Xu, Denis Suslov || June 14 2016

Rumours are swirling that Alibaba’s Taobao will collaborate with UnionPay. While details are still unknown, this partnership is noteworthy as Alibaba's online payments system Alipay and UnionPay have been fierce rivals for the past ten years.

Apple has turned to the mobile payments industry after the smartphone business has slowed down, as a way to increase revenue streams. Apple Pay, Apple’s mobile payment and digital wallet service, has been very successful in the United States. However, Apple Pay has been struggling to tap into international markets due to technical problems, the lack of user adoption, and resistance from banks.

Alibaba's Ecosystem Expansion

Written by Felix Yang || June 08 2016

Starting from only 18 employees and a small B2B platform, Alibaba has become an e-commerce giant in China and already expanded into many other industries. But Alibaba has no plans to stop, Alibaba is now working on an even bigger ambition: to insert itself into ever part of our everyday lives.

Samsung marries Alipay, Leaving UnionPay Heartbroken

Written by Kaiyu Xu, Denis Suslov || June 03 2016

On May 20th, Samsung Pay and Alipay announced their intention to merge their online payment businesses. Now, users can import their Alipay account into Samsung Pay and with just one swipe, users can enable Alipay’s QR code. The whole process can be completed within 2 seconds, even if your screen is locked. This is a huge step for Alipay, since the new user experience increases convenience and eliminates the normal steps of finding the app and waiting for it to load. Alipay’s new process drastically decreases the inconvenience of using the QR code as a payment method. But it begs the question, why would Samsung betray UnionPay to partner with Alipay?

Over the past few years, Alipay, WeChat, and other mobile financial and non-financial platforms have become ubiquitous in China. This ubiquity has led to a fiercely competitive market, so increasingly these companies have begun to look overseas, expanding into foreign markets including Japan, Korea, and Southeast Asia. Although they are tremendously successful domestically, China's large tech players face multiple challenges when expanding abroad including regulation, which has become a real challenge for Tencent in Thailand as of late. 

The PBOC-backed 'Payments Clearing Association of China' published its annual report in May. We talked about some of the digital payments statistics from the report in our previous commentary, but the report also features ranking for China acquiring market, which is even more significant because such data has never been officially published before.

The Annual Payments Report by the Payment and Clearing Association of China was published on May 19th and showed the continuing growth in payment transactions in China. The total amount of online payments reached RMB 2,042 trillion, spread between commercial banks and payment service providers (PSPs).

The launch of Direct Carrier Billing in India: A new era?

Written by Shreya Mukherjee || May 23 2016

Global payments operator Fortumo and India’s Reliance Communications (RCOM) have launched direct carrier billing where RCOM’s customers can purchase digital content and games by charging the payments to their mobile bill or mobile prepaid account. Reliance customers can now enjoy a host of digital entertainment content on the move on their mobile devices, across movies, music, games and live TV, starting from just Rs. 10 (15 cents) for 1 day of access, all by paying through their mobile postpaid bill and mobile prepaid account.

As a growing number of foreign banks wind up operations in India, IT companies’ revenues from BFSI are growing slower than ever (21% in 2015 vs a projected 10% for 2016). Most IT majors derive a significant portion of their revenues from banking and insurance sectors - as high as 40% in some companies. However, this situation could improve with 'Payments Banks' (PB) set to roll out in the third quarter of 2016. 

The long expected payment system of smartphone producer Xiaomi has finally entered the market. By cooperating with China’s dominant card-payment processor China UnionPay, users can now make purchases by using their phone and Xiaomi Pay through China UnionPays’ Quickpass system. The company’s latest offering comes as the third-party mobile payment market continues to grow tremendously. According to research firm Analysys Mason, the market valuation was set at 16 trillion yuan in 2015. This has attracted not only Chinese companies such as Huawei and Xiaomi, but foreign companies, as well.

The pie of banking services in India is well spread out amongst various types of banks, ranging from private sector, public sector, foreign banks, rural banks and even cooperatives. However, market forces are starting to whittle down the once varied field of payment service providers (PSPs), and it is starting to look more like a two horse race similar to other e-commerce markets in Asia. 

There's a clearing platform in development that might change the playing field of the payments industry in China. The Payment and Clearing Association of China had a member congress in April and has approved a proposal to build an Internet payment clearing platform for non-bank payment institutions.

India’s UPI needs to work on another UPI

Written by Ketan Warikoo || April 18 2016

The financial services sector in India is at it again; at least the regulators and the mainstream business publications are. Talking up UPI (Unified Payments Interface) as a panacea for India’s challenges with financial inclusion, cash economy (read black money), plateauing digital ecosystem and you name it. 

Ecommerce companies in India embracing UPI for Payments

Written by Ketan Warikoo || April 04 2016

Ecommerce major Flipkart’s acquisition of UPI based startup PhonePe Internet Pvt Ltd shows that the payment space is heating up at a rapid pace. Incidentally PhonePe, the Bengaluru based startup was launched by three former Flipkart executives just four months back, and is focusing on peer to peer payments, bill payment and merchant payments- areas of interest for ecommerce companies.

E-commerce Regulations in India: More pain than power!

Written by Ketan Warikoo || March 31 2016

Earlier this week the Department of Industrial Policy and Promotion (DIPP) came out with guidelines allowing for 100 percent Foreign Direct Investment (FDI) in online retail of goods and services.

Official Fintech regulator set up by China government

Written by Qinwen Wang || March 30 2016

China’s fintech sector has enjoyed significant development, but has recently been constrained by more active regulators who have increased their rate of regulation to try and stay ahead of the industry development. After two years of planning and industry development, a public-private body was established by the People's Bank of China - the National Internet Finance Association.

Last week saw the first ever IPO by an Indian e-commerce company. Infibeam’s IPO however, might not provide an accurate baseline for the booming Indian ecommerce industry.

How much it actually costs Tencent to make a WeChat payment

Written by Denis Suslov || March 22 2016

Tencent was reporting its quarterly earnings on March 17th and for the first time the company disclosed its WeChat Wallet fees that the company pays to partner banks. Tencent CEO Pony Ma said the fees are 0.1% of each transaction and totalled more than RMB 300 million in January.

Integration is winning the payments race in India

Written by Ketan Warikoo || March 21 2016

The payments space in India is heating up. Smaller players are looking at exits through consolidation into bigger players. The bigger players have challenges of their own.

The recent move by the National Payments Corporation of India (NPCI) to initiate a ‘Unified Payment Interface (UPI)’ which aims to simplify and provide a single interface across all banking payment systems is a welcome decision. It is understood that 30 banks have evinced interest to commence UPI-based services in the new financial year (April 2016-March 2017) in India.

China’s mobile giant Huawei held a signing ceremony in Huawei's Shenzhen headquarters with Bank of China to co-develop next mobile based payment system Huawei Pay. This announcement was just released after Apple Pay and Samsung Pay claimed to make its entry in to China.

Can Indian IT companies ever win the blockchain race?

Written by Ketan Warikoo || March 15 2016

Currently Indian IT companies draw between 25-40% of their revenues from the Banking and Financial Services and Insurance (BFSI) sector. This revenue size of about $35-45 Billion implies that Indian IT continues to draw its sustenance from the BFSI universe.

Although UnionPay is known for its control of the domestic Chinese payment market, it also has over 50 million cards issued overseas. So in other words, a China UnionPay branded card issued by a foreign bank in a foreign country and a foreign currency. In its international push, UnionPay would like its cards to be used both online and offline. Foreign cardholders are increasingly using them for paying at POS and for ATM cash withdrawal, however, there was never a compelling case to use UnionPay cards online, where established card brands like Visa and MasterCard dominate.

More eWallets in India - How many is too many?

Written by Ketan Warikoo || March 09 2016

The last few months saw some big announcements in the e-wallets space in India. Wallet adoption, particularly on mobile, has been quite rapid in India, with wallet based transactions doubling in both number of transactions (153 Million in 2015 vs 67 Million in 2014) and value ($820 Million in 2015 vs $329 Million in 2014) as compared to the previous year (Q4 comparison from RBI data).

Is Meituan a payments provider without a license?

Written by Denis Suslov || March 08 2016

Recently a lawyer in China caused a stir in the payments industry by filing a complaint with the People's Bank of China (PBOC) on Meituan, China’s major O2O platform which is worth tens of USD billions. The complaint alleged that Meituan is engaged in payment settlement without having a required payments license.

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