Recently, domestic leading cross-border payment institutions have intensively launched important overseas layouts. On the one hand, Lianlian Digital and PingPong have successively achieved new business breakthroughs in the Middle East and Southeast Asia. Some have acquired licenses and some have cooperated. On the other hand, Ant International’s APEC region Ant’s “Business and Travel Connect Action” has accelerated again, with the number of transactions soaring by 180%.
The industry believes that the leading cross-border payment players have quickly established a foothold in emerging markets by relying on different overseas strategies such as licensed infrastructure, strategic cooperation, and ecological closed loops. This is also the mainstream path for domestic cross-border payment institutions to go overseas and the epitome of the industry. In the future, the payment market will present a layered pattern in which domestic oligarchs are concentrated and global diversity coexists.
Intensive placement of leading institutions
Judging from the latest industry trends, leading players have made frequent overseas moves in recent days, and each has its own focus. The differentiated layout characteristics are very obvious.
For example, recently, Lianlian Digital officially announced that it has obtained a Type 3D payment license issued by the Dubai Financial Services Authority (DFSA), which also means that the institution has opened a new stage of compliance and licensed operations in the Middle East market.
After obtaining the license, relying on relevant qualifications, Lianlian Digital will build localized financial infrastructure, link local banks to open customer fund accounts, and further strengthen the fund processing and cross-border settlement capabilities in the Middle East. At the same time, it can also support the connection between fund collection and payment and account system management and cross-border capital flows in the Middle East. This is a great benefit for Chinese companies to expand the Middle East market and Middle East companies to connect global commerce.
As of now, the number of payment licenses and related qualifications held by Lianlian Digital has increased to 68 globally, covering many important markets such as Mainland China, Hong Kong, Singapore, the United States, the United Kingdom, Luxembourg, Thailand, Indonesia, and Canada.
Different from Lianlian’s self-built layout, PingPong chose to use strategic cooperation to leverage regional market expansion and reached cooperation with Kasikornbank Group (KBank), one of Thailand’s four major commercial banks.
The two parties stated that they will jointly develop one-stop, full-scenario cross-border payment services, focus on the needs of foreign trade companies going overseas, and provide financial support for global and regional operations of companies. This is also regarded by the industry as a lightweight cooperation model to quickly penetrate the core markets of Southeast Asia.
Ant International focuses on the ecological development path of the platform.
At the beginning of the year, Ant Group launched the “APEC Business and Travel Connectivity Action” to support regional interconnection and digital trade development from two aspects: inbound payment facilitation and trade finance facilitation.
In April this year, under the guidance of the People’s Bank of China, Ant International supported the launch of cross-border QR code payment between China and Vietnam, and cooperated with UnionPay to launch the cross-border interconnection between Indonesia’s QRIS national QR code payment system and the Chinese payment ecosystem.
Data show that in the past three years, the number of purchases and the number of Alipay+ cooperative wallet tourists in APEC countries have increased by 150% and 115% respectively.
Especially in APEC countries in Southeast Asia, where Ant International focuses its efforts, the number of transactions increased by 180%, and the number of payers increased by 145%.
The five APEC members, Indonesia, Mainland China, Malaysia, South Korea and Singapore, have become the economies with the fastest growth in transaction value and number of transactions, driving consumption activity and economic linkage in the region. It is not difficult to see that the scale advantage of the platform ecosystem continues to be highlighted.
Where are the new growth poles in the industry?
In the past two years, cross-border payment has been a hot word, and many institutions have poured into it, but their respective approaches are different.
Licensing is still the core threshold.
“Different industry entities have different ways of strengthening at this stage. Some are obtaining local licenses to build their own operating systems and firmly grasp the core aspects of fund settlement. Some institutions are cooperating with local institutions and leveraging existing channels to quickly implement business, with the goal of quickly rolling out local service networks. And relying on existing traffic scenarios to build services
“Business ecology, relying on system linkage to continuously leverage transaction scale, can only be achieved by platform institutions like Ant, because money can be made in other ways.”
Wang Pengbo, chief analyst of Broadcom Consulting, commented that each company’s own resource conditions and development plans are different, resulting in different layout methods, which can promote the development of overseas markets.
Wang Pengbo further said that compared with previous years, the current cross-border payment market has also seen several core changes. On the one hand, supervision has become stricter and compliance requirements have increased. Many places around the world have strengthened payment license management and anti-money laundering reviews, and licensed operations have become standard; on the other hand, technology
Technology-driven efficiency upgrades, the popularization of risk control, blockchain clearing and mobile payments, promote transaction timeliness and cost reduction; in addition, the demand structure is differentiated, the demand for cross-border e-commerce, business travel and small, medium and micro enterprises has surged, and the scenarios have extended from single payment to comprehensive financial services and localized services.
Su Xiaorui, a senior researcher at Suxi Zhiyan, further said that there are two key trends in the current industry: first, AI is deeply penetrated into all scenarios, and technical capabilities have become the core productivity of payment institutions, and risk control, channels and operational stability are comprehensively optimized; second, the business focus is shifting from the C-side to the B-side.
As domestic industries go overseas and production capacity relocates overseas, the demand for capital flow, information flow, and supply chain finance corresponding to B2B trade explodes rapidly, becoming a new growth pole in the industry.
As for the future industry structure, Su Xiaorui believes that the leading domestic cross-border players are expected to show an oligarchic trend in the future, but looking at the global market, market competition entities from different countries and regions and different tracks may present a situation of diverse coexistence.
Key variables in the industry landscape will include whether barriers to high-value licenses can continue to accumulate, whether the breadth and depth of B2B services can continue to expand, and whether technology and AI capabilities can be effectively used by organizations.
“It is recommended that institutions give priority to consolidating global compliance qualifications, focus on arranging high-potential emerging market licenses, and build localized compliance systems; in addition, they must strengthen technical capacity building, invest in AI risk control, improve transaction efficiency and security levels, and also promote ecological layout, integrate upstream and downstream resources based on their own advantages, and expand comprehensive services such as payment, settlement, and financing.” Wang Pengbo said.
