Bottom line: UnionPay’s launch of a new mobile payments service is a long-overdue answer to challenges by Alibaba and Tencent, and is somewhat late but also vital to maintaining its eroding position in China’s electronic payments market.
UnionPay rolls out mobile wallet card
After coming under growing assault over the last 2 years from the private sector, state-run behemoth UnionPay is finally fighting back by launching a mobile-based payment service to counter rival products from Internet giants Alibaba (NYSE: BABA) and Tencent(HKEx: 700). There’s no mention of either of China’s top 2 Internet companies in an announcement of the new service from UnionPay, even though Alibaba’s Alipay Wallet and Tencent’s WeChat Pay are clearly present in the subtext.
UnionPay is just the latest big state-run company to feel the heat of private sector competition, which is shaking up China’s entire financial sector that was previously dominated by big state-run companies. But UnionPay’s case is even more extreme, since the company operated a state-granted monopoly financial transactions settlement network for the first decade of its existence, similar to global systems run by credit card giants MasterCard (NYSE: MA) and Visa (NYSE: V). Read Full Post…
Bottom line: Apple’s new UnionPay tie-up is aimed at an eventual roll-out of its Apple Pay in China, while Baidu’s reported purchase of 99Pay marks a late but needed bid to boost its electronic payments capabilities.
Baidu eyes 99Bill
A couple of electronic payments stories reflect the rapid changes taking place in China’s banking market, where such payments are quickly making cash and even traditional credit cards obsolete. The higher-profile of the 2 deals has global gadget leader Apple (Nasdaq: AAPL) in a deal to accept payments for its China app store in partnership with leading electronic payments firm UnionPay. The second deal has leading Internet search Baidu (Nasdaq: BIDU) reportedly looking to boost its presence in the space with plans to buy existing player 99Bill for 2 billion yuan ($325 million). Read Full Post…
The following is Part 6 in a multi-part series about the rise of WeChat, the popular mobile instant messaging service owned by Tencent.
By Lanie Nie
WeChat builds up payment capabilities
WeChat has played a key role in Tencent’s (HKEx: 700) recent efforts to build a “federal republic” on the mobile Internet. That interpretation comes from Cheng Lingfeng, a China tech reporter and former Tencent employee, describing Tencent’s strategy of selling stakes to close partners who promote WeChat Payment, a new service that allows users to link their bank cards to their WeChat accounts to facilitate online transaction payments. Such linkage gives WeChat users easy access to selected paid add-on services like shopping, mobile top up and taxi booking. Read Full Post…
PayPal watches a China licenses first foreign e-payments firm
China has issued so many electronic payment licenses by now that I mostly ignore the steady stream of announcements about new licensees, who now number more than 250. I was getting ready to ignore the latest report of a new batch of such licenses, when my attention was attracted by a news bit deeper in the story saying the fifth batch of awards included the long-anticipated first license for a foreign-backed company. The move looks promising for a number of foreign companies that have been waiting impatiently for years to enter the market, led by eBay’s (Nasdaq: EBAY) PayPal online payments unit. Read Full Post…
The following press releases and media reports about Chinese companies were carried on September 14-16. To view a full article or story, click on the link next to the headline.
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Blackstone-Led Buyout Group Lowers Bid For Pactera (Nasdaq: PACT) (English article)
Suntech (NYSE: STP) Announces Management Change, Appoints New CEO (PRNewswire)
A suddenly intensifying rivalry between Internet giants Alibaba and Tencent (HKEx: 700) is building steam, as the pair jockey for position in the fast-growing space for electronic payments and other financial services. It does seem appropriate that these 2 companies are setting the national tone in this race, as they are China’s 2 biggest Internet firms and have risen rapidly on the strength of their ability to innovate. I slightly favor Tencent in this new race due to its ability to roll out new services that complement its existing products at a relatively gradual pace. That contrasts with Alibaba’s most recent approach of launching a much wider range of services at a quicker pace, which runs the risk of overwhelming and confusing consumers.
China’s regulators have never been known for moving fast on anything, and that case seems to apply even more when it comes to allowing foreign players into emerging markets like third-party payment services. More than 2 years after China began awarding licenses for its domestic companies to offer such, foreign companies are still waiting for equal rights in the lucrative domestic market. But now US e-commerce giant eBay (Nasdaq: EBAY) is saying it could soon become the first foreign licensee to enter the market, providing both a big opportunity but also a major challenge as it seeks to catch up to Chinese rivals with more than a 2-year head-start. Read Full Post…
