China Third Party Payment Review /04/2015

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China  Third  Party  Payment  Review  2015















  Third   Party   Payment   Company:   Refer   to   payment   service   providers   that   are   independent   from  merchants  and  banks.  Representa;ve  players  in  China  include  Alipay,  Tenpay,  ChinaPay,   99Bill,  and  ChinaPnR,  among  others.

  Online   Payment:   Refers   to   money   transfers   made   over   the   Internet   between   users   and   merchants   and   among   merchants   under   the   payment   command   via   equipment   such   as   desktop   or   laptop.   Online   payment   in   this   research   specifically   refers   to   payment   made   via   third-­‐party  payment  plaIorms.

  Mobile  Payment:  Refers  to  non-­‐voice  money  transfer  and  payment  made  via  mobile  devices   (mobile   phone,   PAD,   e-­‐reader,   PSP,   and   more)   on   the   basis   of   wireless   communica;ons   technology  (Bluetooth,  infrared,  NFC,  RFID,  mobile  Internet,  and  SMS,  among  others).  Mobile   payment   in   this   research   only   includes   the   payment   of   products   and   services   provided   by   third-­‐party  plaIorms.  

  Acquiring   Service:   Refers   to   services   including   authoriza;on   for   payment   via   bank   cards,   seRlement,  payment  refusal,  etc.  provided  by  contracted  merchants  to  cardholders  via  POS   devices  (tradi;onal  and  mobile  POS)  and  self-­‐service  payment  machines  (Lakala,  pay1,  ATM,   etc.)  on  the  basis  of  telephone  lines,  Internet  and  mobile  Internet.


Licensed  Companies      

  As  of  Feb.  2014,  a  total  of  250  companies  in  China  obtained  payment  license,  among  which   90   companies   acquired   license   for   online   payment   and   37   companies   received   license   for   mobile   phone   payment.   Beijing   ranked   first   by   the   number   of   licensed   companies   at   55,   followed  in  turn  by  Shanghai  at  54,  Guangdong  at  21  and  Zhejiang  &  Jiangsu  each  at  16.


Third  Party  Payment  User  Base  

Online  Payment  Users  Mn Penetration  Rate Mobile  Payment  Users  Mn Penetration  Rate

2013 260 42.10% 125 25.10%

2014 304 46.90% 217 39%


Third  Party  Payment  GMV  (Including  online  payment,  mobile  payment,  telephone  payment,   prepaid  card,  etc)  


Market  Share  of  China  Major  Third-­‐party  Payment  Companies  in  2013  by  GMV  

China  UMS:  China   UnionPay  Merchant   Service

  China   UMS   accounted   for   the   largest   share   in   the   market   at   39.8%   in   2013,   followed   respec;vely   by   Alipay   at   21.2%   and   Tenpay   at   7.7%.   The   share   of   other   par;cipants   all   fell   short  of  7%.

  As   the   strongest   and   most   influen;al   player,   China   UMS   monopolized   China   third-­‐party   payment  market  through  extensive  corporate  user  base.


Market  Share  of  China  Major  Third-­‐party    Online  Payment  Companies  in  2014  Q3  by  GMV  


Market  Share  of  China  Major  Third-­‐party  Mobile  Payment  Companies  in  2014    by  GMV  


Trend:  More  Acquisi;ons  in  Payment  Industry  

  At   present,   there   are   250   licensed   third-­‐party   payment   operators   in   China   with   a   total   of   525   licenses   of   different   kinds.   The   agtude   of   related   authori;es   towards   re-­‐issuance   of   license   and   the   compe;;ve   landscape   of   the   sector   indicate   that   major   payment   markets   have  reached  satura;on  point.  

  According  to  iResearch,  there  are  three  acquisi;on  trends  in  the  sector:


Trend:  Mobile  Payment  

  Mobile  payment  will  rapidly  expand  to  town  and  the  rural  area.   Mobile  phone  purse  will  be  more  like  a  real  purse.

  Mobile   payment   users   will   be   more   obviously   featured   by   small   amount   and   high   using   frequency.

  Mobile  payment  will  give  impetus  to  the  expansion  of  mobile  app  business  model.   Mobile  payment  will  be  the  marke;ng  analysis  tool  of  merchants.


Alipay  Service  Fee  for  Tmall  and  Taobao  

Debit  Card Union  Pay  Credit  Card International  Credit  Card Taobao Free

1%  (buyer/  Seller,  if  sellers provide  credit  card  service, the  1%  will  charge  to  the sellers)

Buyer:  1.5%  -­‐  3%

(depends  on  the  bank) Seller:  1%

Tmall Free

1%  (buyer/  Seller,  if  sellers provide  credit  card  service, the  1%  will  charge  to  the sellers)

Buyer:  1.5%  -­‐  3%

(depends  on  the  bank) Seller:  0.8%


Alipay  Service  Fee  for  Merchants  not  in  Alibaba  System  (Real-­‐;me  Payment)  

Serice Period Transacation Volume Service Fee

US$0-10,000 1.20%

US$10,000-80,000 1%

US$80,000-160,000 0.90%

US$160,000 --320,000 0.80%

US$320,000 and above 0.70%

If the annual transcation volume is US$160,000, the service fee should be: 10,000*1.2%+ (80,000-10,000) *1%+(160,000-80,000)*0.9

Package 1: Step Package

1 Year

Service Period Prepaid Fee Transaction Volume Conversion Rate Rate for the volume over the package

US$100 US$10,000 1% 1.20%

US$300 US$32,000 0.90% 1.20%

US$600 US$73,000 0.80% 1.20%

Package 2: Quota Package

1 Year

Debit  Card Union  Pay  Credit

Card International  Credit  Card

Buyer Free 1% 1.5%-­‐3%


Tenpay  (Real-­‐;me  Payment,  including  WeChat  Payment  for  mobile  end)  

Buyers:  Free Base  Rate

Package  Offers Service  Period Prepaid Transcation  Volumes Conversion  Rate Rate  for  the  volume over  the  package

Package  1 1  Year US$80 US$10,000 0.96% 1%

Package  2 1  Year US$300 US$30,000 0.84% 1%

Package  3 1  Year US$600 US$80,000 0.75% 1%

Package  4 1  Year US$1,000 US$160,000 0.70% 1%

Package  5 1  Year US$2,000 US$300,000 0.60% 1%

Package  6 1  Year US$7,500 US$1,600,000 0.45% 1%


China  Union  Merchant  Service  Online  Payment  

Merchant  End  Software  


Membership  Annual  Service  Fee


Transcation  Service  Fee





*  Transac;on  Service  Fee  may  be  different  subject   to  the  terms  of  each  contract.


For  More  Informa;on     hRp://   hRp://   h R p s : / / b . a l i p a y . c o m / o r d e r / p r o d u c t D e t a i l . h t m ? productId=2012111200373124&tabId=3#ps-­‐tabinfo-­‐hash   hRp://   hRp://   hRp://   hRps://   hRp://   hRp://




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