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【纽伦港新动态•第225期】花旗银行:中美FinTech公司对比

2016-06-14 金融读书会

编者语:

文章节选自花旗银行2016年3月所出报告《数据摧毁力:FinTech是怎么把银行业逼向引爆点的》。文章详细对比了中国的FinTech巨头百度、阿里巴巴和腾讯(即“BAT”)和美国的FinTech巨头Google、Apple、Facebook和Amazon(即“GAFA”),并指出BAT在金融服务方面的发展已经远超其国际同侪,其原因有四点:进入市场早、优越的电子商务生态系统、巨大的用户基数和成功的战略。同时,第三方支付系统在中国FinTech公司的发展中起到了重要作用,第三方支付在中国成功的原因主要有:传统银行业对电商的发展适应较慢、宽松的监管、便捷性、安全以及成本低。相比之下,金融服务对美国的巨头公司而言更像是为了提高其用户粘性的副产品,而不是公司的主体战略。这也是中国FinTech巨头强于美国的一个重要原因。敬请阅读。



文/Ronit Ghose等(花旗银行研究员)

Payment & E-Commerce: China Leads

 

China has some of the world’s largest FinTech companies. They benefit from thedistribution power of the Internet giants of China – Baidu, Alibaba, and Tencent. Thesuccesses of China’s Internet giants in financial services may provide a road map toUS/global Internet giants such as Amazon, Apple, Facebook, Google and Microsoft.

 

But as we will read in this section, China also has some unique features. Chinesetechnology giants Baidu, Alibaba, and Tencent (collectively referred to as "BAT") areahead of western peers (Google, Apple, Facebook, and Amazon, often referred toas "GAFA") when it comes to venturing into financial services. The market share ofAlibaba and Tencent in Chinese third-party payments, at 33% and 10% respectively,is past the tipping point. By contrast, GAFA's market share in non-cash payments isestimated to be less than 2% in the US.



We attribute the FinTech success of the "BATs" in China to the following factors:

 

Early Entry:Alipay and Tenpay were created over a decade ago by their Internetparents initially to facilitate e-commerce or online gaming payments. Among theGAFA's, Google was the first to venture into payments in 2011, seven years afterAlipay.

 

The E-commerce Ecosystem: Global e-commerce is growing rapidly with agross merchandise volume (GMV) of $1.7 trillion globally in 2015 and is expectedto grow to $3.0 trillion by 2018 according to eMarketer estimates. China has byfar the largest e-commerce ecosystem in the world ($672 billion or 40%) and isexpected to grow 133% to $1.6 trillion by 2018 — over half of global ecommerce. Alibaba’s GMV is close to $500 billion in 2015, more than double thatof Amazon. Alipay is hence the largest on-line payment gateway, with totalpayment volume (TPV) in 2015 over 3x that of PayPal.



The Large User Base: China is ahead of developed markets in monetizing thesocial network for payments. Tencent has developed a leading P2P paymentsystem in China, leveraging on the 550 million users in its social network WeChat(a messaging app that integrates messaging and blogging, similar to WhatsAppand Facebook combined).

 


Strategic Importance of Finance to BATs vs. GAFAs: Finance is strategicallyimportant for the BATs. Having started online to facilitate e-commerce or gaming,in a country with a relatively under-developed consumer banking system,payment is now also seen as core to their online-to-offline (O2O) strategy. In thelast two years, Alipay has recruited over 130,000 offline merchants includingrestaurants, supermarkets, taxis, and hospitals. While this is a small number vs.the 17 million point-of-sale terminals in China, the number is rapidly growing.

 

Similar to BATs, the leading US Internet companies have a massive user base.However, they operate in an existing, well-developed consumer paymentssystem and financial services are not as strategically integral or important for theleading Internet companies as it is for their Chinese counterparts. Among theirfinancial peers, Amazon is more likely to be a major player in financial servicesdue to its focus on e-commerce. For Google and Apple, Android Pay and ApplePay are part of their broader strategy to further enhance customer stickiness totheir operating system ecosystem.

 


What's Third-Party Payment?

 

Third-party payment is an authorized (licensed) non-bank organization thatfacilitates payment. The third-party payment companies are licensed by thePeople's Bank of China (PBoC). There are three types of licenses 1) online/mobilepayment 2) point of sale license and 3) pre-paid card issuance. As of end of 2014,there were 269 licensed third-party payment companies in China, of which 117companies have online/mobile payment licenses, 62 have point of sale licenses and166 are licensed for pre-paid card issuance. A company can have multiple licenseto perform more than one function. Alipay for example has two and a half licensesenabling it to do the online/mobile payment, the point of sale as well as issuance ofpre-paid card (online only – hence half) licenses.

 

The third-party payment companies were initially created to facilitate payment on ecommerce platforms. The ‘third-party’ serves as a middle man and provides escrowbetween the buyers and sellers. When a buyer purchases an item online, themoney is transferred from the buyer to the ‘third-party’. The third-party will thennotify the seller to ship the goods. Only when the goods are received and acceptedby the buyer, is the money transferred from the third-party to the seller.

 

In recent years, the third-party payment companies have diversified beyond ecommerce and expanded to P2P payments and offline payments. Third-partypayment companies have accounts open with a network of commercial banks andact as an intermediary for interbank payments. The payment flow from a payer’sBank A account to a beneficiary’s account in Bank B is illustrated in Figure 38.Payments done this way have far higher success rates than traditional interbankpayments.



Why Is It Successful?

 

Under-Developed Banking SystemChina’s commercial banks were slow toadapt to digital banking and online payments. The rapid developments in ecommerce allowed third-partypayment companies to offer convenient, reliable,faster, and cost efficient alternatives to traditional bank payments.

 

Relaxed Regulation:Regulation had been relaxed in the third-pay paymentwith no Know Your Client (KYC) requirement or transaction limit until recently(August 2015). In July 2015, the PBoC announced in a draft proposal to tightenregulations in the payment space, to introduce KYC requirements, and toimpose daily and annual transaction limits. The initial proposal set a dailytransaction limit in the range of RMB5k-200k (~$1-$31k). Despite thetoughened regulatory stance on third-party payments, we doubt regulators willbe able to protect the banks from digital disruptions in China because of theconsumer behavioral shift that has occurred.

 

Convenience:Similar to developed markets, third-party payments improvethe user experience. Alipay is the most used payment method for e-commerceplatforms. The integration of Tenpay to WeChat, the largest social networkingplatform, simplifies the P2P payment.

 

Security:With the third-party payment companies acting as escrow, itsignificantly reduces potential e-commerce fraud. Hence, third-party payment isthe most preferred on-line payment method for Internet users.

 

Lower Fees:P2P payments are usually not free of charge for interbank orinter-city transfers in China. Third-party payments provide a cheap alternativefor small ticket money transfers. Maybe partially due to the pressure fromalternative payments,Chinese banks are modernizing their digital offerings andreducing/eliminating transfer fees to maintain market share. ICBC, the largestbank in China, announced in February 2016 that it would provide free P2Pmoney transfers through its Internet banking platforms. Tencent’sTenpay, onthe other hand, announced around the same time that it was going to charge10 basis points for cash in and cash out (transfer digital money in and out ofbank account) on its digital wallets.(完)

 

文章来源:花旗银行官网2016年3月(本文仅代表作者观点)

本篇编辑:邵杨楠


【纽伦港新动态】专栏往期回顾: 

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第215期:Andrew Gracie:如何解决大而不倒问题

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第218期:德拉吉:低利率的货币政策

第219期:耶伦:加息之旅即将开启

第220期:Vítor Constâncio:宏观审慎工具中的保证金和估值折扣

第221期:ESMA:分布式账本技术在证券市场的运用

第222期:欧达礼:香港作为国际金融中心的地位——监管的重要性

第223期:加强A股监管,助力供给侧改革

第224期:傅晓:有关美联储加息的七件事 


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