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When dining in a restaurant, you can use your mobile phone to scan the merchant's Alipay QR code when checking out, and payment can be completed in seconds; when you invite three or five friends to watch a movie, you can open WeChat Wallet and pay without paying cash... The scale of my country's third-party payment market has reached trillions of yuan.

On July 19, the reporter learned that the Jiangxi market is in turmoil: the third-party payment license of one of the only two legal person payment institutions, Jiangxi PayPass Information Technology Co., Ltd. (hereinafter referred to as PayPass), was suspended from renewal, while giants such as Alipay and Tenpay have successively established branches in Jiangxi, and there are more than 30 third-party payment companies in existence in Jiangxi.

Industry insiders pointed out that the market mechanism of survival of the fittest is accelerating the transformation and upgrading of the payment industry, showing a development direction of standardization, specialization and diversification.

Customers pay using a QR code.

The industry is accelerating its reshuffle and the number of third-party payment licenses is decreasing

Recently, two pieces of news about third-party payment licenses have attracted industry attention. First, on July 9, the validity period of the third-party payment licenses held by 16 third-party payment institutions expired. According to relevant regulations, third-party payment licenses are renewed every five years, and whether they are successfully renewed is related to whether they can continue to operate. The business scope of these 16 third-party payment institutions covers Internet payment, bank card acquiring, mobile phone payment, prepaid card issuance and acceptance, etc. Among them, more than 10 third-party payment institutions involve Internet payment.

Second, on July 5, the People's Bank of China announced the renewal information of third-party payment licenses (the sixth batch in July 2023). Among the 18 third-party payment licenses to be renewed, 12 third-party payment institutions passed smoothly, 2 were suspended from review, 2 were not renewed, and the remaining 2 voluntarily withdrew. Among them, the third-party payment institution registered in Jiangxi, Huiming Business Service Co., Ltd. (hereinafter referred to as Huiming Business), passed the renewal.

The third-party payment license, also known as the "Payment Business License", is a non-financial industry qualification certificate issued by the People's Bank of China in accordance with relevant laws and regulations in order to strengthen the management of non-financial institutions engaged in payment business. The business types include bank card acquiring, Internet payment, mobile payment, TV payment, fixed-line payment, and prepaid card issuance and acceptance.

In recent years, the market mechanism of survival of the fittest is accelerating the reshuffle of the third-party payment industry, and the number of third-party payment licenses has been decreasing. According to data from the People's Bank of China, since the first batch of third-party payment licenses were issued in May 2011, a total of 271 third-party payment licenses have been issued in the past decade. As of July 15, the total number has been reduced to 178, with a total of 93 cancelled. Among them, prepaid card business third-party payment licenses account for the vast majority.

There are only two legal person payment institutions in Jiangxi, one of which is "abnormal"

For a long time, in Nanchang and even in Jiangxi, only PayPass and Huiming Business had obtained third-party payment licenses issued by the People's Bank of China. PayPass's business was the issuance and acceptance of prepaid cards, covering Jiangxi Province; Huiming Business's business was the issuance and acceptance of prepaid cards, and it had issued the "Yi Tong Card".

However, the shareholders and legal representatives of Huiming Business have since been changed and approved by the People's Bank of China. All the original shareholders have withdrawn, and Huiming Business has become a subsidiary of a Shanghai group company. Huiming Business is mainly engaged in the issuance and acceptance of prepaid cards, and its business covers Jiangxi, Hubei and Shanghai. Public information shows that Huiming Business's payment brand is Chexiangfu, an O2O brand for automobile life payment. In May 2015, it first launched a membership card with related functions such as top-up payment and points redemption.

As the first institution in Jiangxi to obtain a third-party payment license, Feifeitong was established in March 2007 and listed on the New Third Board in May 2017. Its main business is to provide customers with prepaid card issuance and acceptance services, computer software platform development and technical consulting services, and O2O retail mall services based on its own third-party payment license and technology.

On April 8, 2021, Feifeitong issued an announcement that it would suspend trading from April 9, 2021, due to "the needs of the company's business development and long-term strategic planning."

The website of the People's Bank of China shows that the payment license held by Feifeitong was first approved on June 27, 2012, and was renewed thereafter and is valid until June 26, 2022. In June 2022, the renewal of Feifeitong's payment license was suspended.

On July 19, the reporter tried to log in to the official website of the payment channel, but found that it could not be opened. As of press time, the reporter called the person in charge of the payment channel several times, but no one answered.

As supervision becomes stricter, many payment institutions are entering the Jiangxi market

Since 2016, the issuance of third-party payment licenses has been tightened. After the eighth batch of licenses were issued, no new third-party payment licenses have been approved, which means that the third-party payment license market has entered a stock stage.

"Although they started not too late, under the background of industry development, Huiming Business and PayPass are still small players in the third-party payment industry, and the third-party payment market in Jiangxi is dominated by the strong." A senior person in the financial industry in Jiangxi said that in recent years, more and more payment institutions have set up branches in Jiangxi, including Alipay, Tenpay and other giants, and the market competition is very fierce. At present, excluding PayPass and Yibao Payment and Fuyou Payment, which have withdrawn from the bank card acquiring market in Jiangxi, there are more than 30 payment institutions doing business in Jiangxi.

In fact, in terms of acquiring business, there are two main acquiring entities: banks and third-party payment institutions, including traditional POS machines, smart terminals and mobile aggregate payment. With the penetration of mobile payment and the avoidance of risks related to card swiping, QR code acquiring is becoming the first choice for small and micro businesses. Therefore, when promoting QR code acquiring, many institutions will give merchants relatively large discounts, such as reducing handling fees, providing subsidies, etc., and the competition has become fierce, and some violations have followed.

On June 20, the Jiangxi Branch of the People's Bank of China imposed administrative penalties on the Jiangxi Branch of Suixingfu Payment Co., Ltd., which attracted widespread attention in the market. The penalty information showed that the Jiangxi Branch of Suixingfu Payment Co., Ltd. failed to transmit relevant transaction information completely and accurately in accordance with regulations, and was fined 90,000 yuan and confiscated 482.38 yuan of illegal income.

The market generally believes that although the amount of the fine may not seem large for third-party payment institutions, it is a strong warning and also demonstrates the determination and attitude of the regulators to strengthen supervision.

On July 2, the Jiangxi Branch of the People's Bank of China once again imposed administrative penalties on third-party payment institutions. Huiming Business was fined 330,000 yuan for irregularities in its prepaid card recharge business.

"In this context, if third-party payment institutions in Jiangxi want to 'break through', they should operate in compliance and actively respond to regulatory policies. Ensuring the sustainable development of their business is the key." Wang Pengbo, a senior analyst in the financial industry at Broadcom Consulting, believes that the "Regulations on the Supervision and Administration of Non-Bank Payment Institutions" has been implemented, further clarifying the rights, obligations and responsibilities of all parties in the payment industry. In the future, third-party payment institutions can enter the payment segment through their own resources on the basis of compliance, win the market with word of mouth, and ensure the sustainable development of their business.

Text/Tulanchun, Jiangnan Metropolis Daily Omnimedia Reporter Lu Yong, Intern Zou Jianfeng