China Cross-border Payment:

Seizing Investment Opportunities in the Payment 4.0 Era

Executive Summary

​​​​​​O​verall payment sector has significantly outperformed other fintech sectors and the general market

  • ​​​​​​​​​​​​​​​​​​​​​​​Share prices of selected listed payment companies have achieved 120%+ growth in the past 5 years (Nov. 2005 – Aug. 2019). Examples incl. Square (500%+), PayPal (180%+), etc., compared to 45% increase by the S&P and -70% by Lending Club

​Recent investments in cross-border payment have been concentrated in the area of acquiring, collection and remittance in China, Europe, and the US. 

  • ​​​​​​​Potentiall​y new global payment giants will emerge with focus on cross-border payment into and out of the China market by capturing the people, goods and capital flows

Te​chnology drives the development of cross-border payment landscape

  • From American Express and Global Blue born in the early telegraph era, to recently disruptors such as Alipay, WeChat Pay, and Stripe driven by mobile internet technologies, the cross-border payment industry has experienced three stages of development. We believe that with the popularity of blockchain, AI, and cloud computing technologies, cross-border payment will enter into a new stage of development marked by digital currency based on blockchain (the “4.0” era)

The lo​ng and complex cross-border payment chain has created a diverse industry ecosystem consisting of players from single solution providers to integrated solutions providers. International payment institutions, Chinese domestic third-party payment companies, and emerging startups are leveraging its comparative strength to participate in the cross-border payment industry

  • ​​​​​The acquiring business has high technical barriers for system technologies and requires licensing. Several Chinese payment players have tapped into business overseas in recent years by leveraging their local expertise of serving Chinese companies
  • Remitta​nce business, requiring lower level o tech and license expertise, has attracted startups and capital in recent years. A price war has already started in the B2B remittance sector and the market is becoming more competitive

We​ approach the sector with four key criteria: compliance, branding, technology, and account system

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