Big Banks Acknowledge a Failure to Keep Up with China’s FinTech Rivals
Big banks have said that they are failing to maintain pace with China’s fintech rivals as mobile payment methods gain dominance.
Jing Ulrich, vice chairman Asia Pacific at JPMorgan Chase, recently praised the likes of online payment firms Alibaba Group’s Alipay and Tencent’s Tenpay who are dominating the fintech sector.
In a report from the South China Morning Post , she said at the Rise Conference in Hong Kong:
JPMorgan every year, as we speak, processes through our QuickPay 94 million payments. But Tencent, the Chinese company, over Chinese New Year, in five days processed 46 billion payments. Basically that means 800 million payments per hour.
She added:
Visa has a maximum capacity of processing 25,000 payments per second. But Alipay can process 50,000 payments, twice as much, per second.
Alipay, a financial application created by Ant Financial, which is a financial company operated by Alibaba, has become the most used platform for payments in China with more than 900 million accounts and 350 registered and active users. With a market cap value of around $60 billion in January, Alipay looks to have taken over the Chinese fintech industry and is continuing to attract traditional banking customers with its alternative banking services.
Tencent, which is also the operator and developer behind WeChat, a messaging app in China that has around 800 million daily users, has subsidiaries within the Internet and mobile phone value-added services. It was recently reported that the company was developing its own blockchain platform.
Goldman Sachs has also noticed a rise in Chinese fintech companies being used for online payment services.
According to a report, from 2010 to 2016, third-party payments grew over 74 times from $155 billion to $11.4 trillion.
The online payments sector is showing no signs of slowing down as more people turn to alternative methods.
According to China’s central bank, the People’s Bank of China (PBoC), online payments through non-bank services grew by 60 percent in Q1’17 to 47 billion transactions, putting the figure at $3.9 trillion.
In May, it was reported that the PBoC had established it’s own fintech committee. It’s aim is to strengthen, work, research, plan and coordinate financial technologies.
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