As Q3 2025 financial reports were released in quick succession, the divergence among payment institutions intensified. While growth slowed in traditional acquiring and lifestyle services sectors, ‘cross-border payments’ became one of the few business lines in many institutions’ reports that still maintained high growth rates. Several listed companies, such as Lakala (300773.SZ), Newland Computer Technology (300130.SZ), and Newland China (000997.SZ), disclosed in their Q3 reports that their cross-border transaction volume, number of merchants, or overseas revenue all saw double-digit or even triple-digit growth.
At the same time, foreign institutions are also accelerating their entry into the market.
</ … Payoneer, SUNRATE, and other institutions have acquired Chinese payment licenses through mergers and acquisitions this year, while Airwallex continues to see its transaction volume and customer base grow in the Chinese market. Against the backdrop of tightening licenses, stricter regulations, and declining fees, cross-border payments have become a new battleground for various institutions. Cross-border business has become a breakthrough for profitability. Looking at the third-quarter reports, most payment institutions still face downward pressure on their core businesses. Lakala achieved revenue of 4.07 billion yuan in the first three quarters, a year-on-year decrease of 7.33%; net profit attributable to the parent company was 339 million yuan, a year-on-year decrease of 33.9%. However, its cross-border payment business bucked the trend, with merchant scale increasing by 71.91% year-on-year and transaction volume increasing by 77.56% to 60.2 billion yuan. The company stated in its financial report that overseas business has become a structural growth driver. PayKKa, the cross-border brand of Newland Payment Technology, performed even more impressively. This brand has opened local accounts in the United States, the European Union, Southeast Asia, and other regions, covering multi-currency payments. In the second quarter of 2025, the number of merchants and transaction volume on its platform increased by 169% and 272% respectively compared to the previous quarter. Newland stated that the continued expansion of its cross-border payment business was the core factor driving the company's net profit growth of 37.1% in the first three quarters. Furthermore, the company plans to list in Hong Kong, with the funds raised primarily used for global payment network construction and overseas license acquisition. Newland also achieves synergy through 'hardware + payment'. The company's overseas payment equipment revenue increased by 26% year-on-year in the first three quarters, becoming the main driver of performance growth. Its subsidiary, Guotong Xingyi, is accelerating its application for overseas payment licenses, providing cross-border e-commerce and overseas enterprises with integrated 'terminal + clearing' solutions. The deployment of small and medium-sized institutions is also accelerating. Yiwu Small Commodities City (600415.SH)'s YiPay achieved a cross-border transaction volume of 27 billion yuan in the first three quarters, a year-on-year increase of 35%; Rendong Holdings (*ST Rendong, 002647.SZ)'s Helibao cross-border payment revenue doubled, driving the parent company's net profit to increase by 356.65% to 367 million yuan.
Why the shift overseas? Since the beginning of this year, the consensus in the industry is that shifting to cross-border business is no longer a “choice,” but a “survival question.” On the one hand, the domestic payment market is fiercely competitive, merchant acquisition costs remain high, and transaction fees have been suppressed for a long time. Third-party payment institutions are facing declining fees, intensified competition, and narrowing profit margins. Data from my country’s General Administration of Customs shows that in 2024, my country’s total import and export volume reached 43 trillion yuan, of which the scale of cross-border e-commerce import and export reached 2.63 trillion yuan, a year-on-year increase of 10.8%. The number of companies going overseas and payment demand are growing simultaneously. An executive of a payment institution said that as small and medium-sized brands accelerate their overseas expansion, their pain points in payment settlement, foreign currency collection, fund aggregation, and tax compliance are obvious. “This has given local institutions an opportunity for a second growth curve.” The progress of RMB internationalization also provides institutional support for cross-border payments. Meanwhile, foreign payment institutions are accelerating their expansion in the Chinese market. 2025 has become a “license-obtaining year” for foreign payment institutions. Behind this “license fever” lies a strategic need for local compliance. After “landing,” foreign institutions are frequently focusing on technological advancements. Faced with competition from foreign capital, local institutions are also “breaking through” through technological and ecosystem development. However, while the cross-border payment market is hot, the risks are not low, and compliance remains the primary challenge. According to regulatory penalty information, in the first half of 2025, more than ten payment institutions were penalized for improper anti-money laundering management, including some leading companies. The compliance requirements for data security and fund flow monitoring in overseas operations are more complex, becoming a red line for institutions. Furthermore, changes in the macroeconomic environment are also testing the industry’s resilience. Broadcom Consulting predicts that, affected by factors such as tariff adjustments and geopolitics, the growth rate of cross-border internet payment transactions may fall to around 10% in 2025. The export e-commerce market is approaching saturation, customer acquisition costs for small and medium-sized institutions are rising, and industry concentration will further increase. Pan Helin, a member of the Expert Committee on Information and Communication Economics of the Ministry of Industry and Information Technology, stated that the development of cross-border payments must simultaneously consider two main lines: one is cross-border payments for Chinese enterprises’ foreign trade and investment, and the other is the participation of Chinese institutions in overseas local payment markets. The key to the former lies in compliance and risk control, while the latter requires keeping up with the evolution of new technologies such as digital currency and AI, and adapting to changes in payment habits.
