What’s new: China’s third-party payment industry is consolidating amid an industry revamp that has eliminated many unqualified players.
By the end of March, the number of licensed non-bank payment operators totaled 193 in China, compared to 201 at the end of 2022 and 224 at the end of 2021, according to the latest data released by the Payment and Clearing Association of China (PCAC).
At the peak, the total number of industry players reached 270.
Most of the companies that left the market are engaged in the prepaid card business, as per Caixin's findings. Since 2021, about 30 prepaid card issuers have exited the business, Caixin’s calculation based on publicly available information found.
The context: The number of valid payment business licenses has been declining as the central bank revoked licenses for companies failing to meet industry requirements, industry sources told Caixin. Some companies failed to renew their licenses due to limited business while others, mainly prepaid card operators, voluntarily canceled their licenses.
Prepaid card companies have faced sluggish business in recent years. In 2022, total card issuance rose 0.68% year-on-year to 291 million, but the value of the cards declined 9.79% to 61.4 billion yuan ($8.5 billion), according to PCAC. The number of transactions made with prepaid cards, including those for public transportation and shopping, declined 33.9%.
Meanwhile, the size of China’s third-party payment market has seen steady growth. In 2022, the value of transactions through online payment expanded 7.4% to 2,528 trillion yuan, while mobile payments slid 5% to 499.6 trillion yuan, PCAC data showed.
Contact reporter Han Wei (weihan@caixin.com)
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