Online services shake up China banking world
Non-lenders are now able to conduct online payments, sell wealth management products and offer loans, fuelling fierce competition
Online payment services, wealth management products and lending businesses offered by non-bank companies are changing the landscape of the mainland banking sector.
"It has become very difficult to predict the future of the banking sector," said Wang Xiaoming, a vice-general manager of personal banking at Bank of China.
"New technologies are bringing in sweeping changes to the way people manage their wealth, companies finance their operations and banks do business."
The central government would seek to break the monopoly in the banking sector, former premier Wen Jiabao said early last year. Since then 250 third-party payment licences have been issued, allowing non-bank companies to offer online payment services, issue and accept pre-paid cards, and handle bank card transactions through point-of-sale devices.
Thanks to this mushrooming online e-commerce service, an increasing number of payments are being made on platforms operated by internet companies. Transactions made through this third-party non-bank payment system totalled 3.8 trillion yuan (HK$4.8 trillion) in the second quarter of this year, according to market research company Enfodesk.
Over the same period, non-cash payments - transactions through banks and non-bank companies - amounted to 388.5 trillion yuan, according to the People's Bank of China.