China a gold mine for online payment platform system companies
China’s burgeoning number of Internet users and rapid increase in online shopping are creating new opportunities for online payment platforms.
Last year Chinese spent over 929 billion yuan (US$150 billion) on online shopping, double the amount spent in 2013, according to iResearch Consulting Group. About two-thirds of regular online shoppers, or some 290 million people, use online payment systems, it said.
The main local players in the online payment market are Alipay, launched in 2004 by the Alibaba Group, UnionPay, run by China’s top four state banks, and Tenpay, a unit of Internet company and Alibaba rival Tencent. Newcomers include messenging service WeChat’s payment system and 99bill.com, owned by property and entertainment conglomerate Dalian Wanda.
Alipay and WeChat have been growing faster than government-owned UnionPay in recent years. Foreign companies also see opportunities in China, with Paymentwall, a global monetisation platform founded in California in 2010, opening its 10th foreign office in Beijing recently. For example, US payment company Paypal is keen to expand into mainland market despite regulatory uncertainties. Chinese authorities have much stricter regulations for foreign players in the field of payment related services.
“China will no doubt become a key market for us, based on our service for many online video game makers in the past five years to help them explore global markets,” said Honor Gunday, CEO and founder of Paymentwall. The company first helped game companies get payments through Facebook, and now has about 200 million users.
Gunday said the firm offers multiple local payment options and payment types which can help Chinese customers collect the money for their products from almost anywhere in the world.
“These companies were eager to enter foreign markets but they didn't want to be stuck while seeking payments. That's where we can help to build an interesting payment solution,” he told the South China Morning Post.
Paymentwall began working with Chinese video game makers and social networks such as NetEase, Tencent andrenren.com from 2011. It has also partnered Alipay to help foreign internet companies enter the Chinese market.
“About 20 per cent of our business is from China and it continues to grow,” Gunday said.
Others in the industry said the key to attracting users to an online payment platform lies in convenience and speed.
“A key reason for a payment method to become popular is how much time it can save for customers. Major online payment players have developed mature systems to let customers make payments in a dozen seconds,” said Wang Bo, CEO of One Card Technology, a Beijing-based maker of mobile payment technology.
“Only time matters. That’s why we're developing a chip payment system that can pay within a few seconds and can combine all methods of mobile payment,” he said.