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Posts Tagged ‘ Payment Gateway ’

China’s central bank has ordered online payment groups to operate through a centralized clearing house, a move likely to undercut the dominance of Ant Financial and Tencent by forcing them to share valuable transaction data with competitors.

 

China is the world leader in mobile payments, with transaction volumes rising nearly fivefold last year to Rmb59tn ($8.8tn), according to iResearch. They are now widely used for everything from high-street shopping to peer-to-peer lending. 

 

In addition to generating fees directly, online and mobile payments are a source of valuable data that can be used for such purposes as targeted advertising and credit scoring. 

 

Now the People’s Bank of China is requiring all third-party payment companies to channel payments through a new clearing house by next June, according to a document sent to payment companies on August 4 and seen by the Financial Times. 

 

“The launch of this clearing house is a one-sided loss for the payment institutions. Originally, payment data were proprietary information for them. Now it’s connected to the clearing house, which will probably share it with other partners,” said Zhang Yi, fintech analyst at iResearch, a consultancy.

 

Ant Financial, the financial services affiliate of Alibaba Group, is the market leader in mobile payments, with its Alipay unit processing 54 per cent share of all transactions in the first quarter of the year, according to iResearch. WeChat Pay, linked to Tencent’s mobile messaging app, held a 40 per cent share. 

 

Mr Zhang believes the central bank wants to aid commercial banks in obtaining customer data and prevent Alipay and Tencent from gaining excessive market power. 

 

Hundreds of millions of Chinese consumers and businesses have linked their Alipay or WeChat Pay accounts to their commercial bank accounts, enabling third-party payments to be credited and debited seamlessly. 

 

But, unlike swiping a bank card, when an Alipay or WeChat user makes a purchase, banks do not obtain crucial payment details such as the merchant’s name and location. Instead, the bank record shows Alipay or WeChat as the recipient. 

 

Currently, payment groups maintain separate bilateral relationships with commercial banks to facilitate payments to or from users’ bank accounts. But the latest PBoC instructions require all payment companies to connect to the clearing house by October 15 and to channel all payments through it by June 30, according to the document. 

 

“We are actively participating in the preparation work and will complete the adjustment according to the requirements of central bank,” Ant Financial spokesman Anna Wang told the FT. 

 

The PBoC and Tencent did not respond to a request for comment on Wednesday. 

 

Seven units of the PBoC own 37 per cent of the clearing house, known as the Online Settlement Platform for Non-Bank Payment Institutions, according to Caixin, a financial news website. Payment units of Ant Financial and Tencent each own 9.6 per cent, while 36 smaller third-party payment companies own the remaining equity. 

 

Established last year, the clearing house has capital of Rmb2bn. It began testing in March and around 300 commercial banks are already connected. 

 

Beyond data sharing, the new clearing house will also enable the PBoC to monitor online payments directly without requesting data from processors, strengthening their ability to detect money laundering and other illicit transactions. 

 

“Some third-party payment companies have used their licences to create channels for illegal payments. There really is a need to strengthen anti-money laundering and other regulation,” said Wang Pengbo, analyst at Analysys International.

 

Tencent has opened its credit scoring system to limited group users on QQ, WeChat’s older sibling.

 

This marks a big step forward for Tencent:  not only does this fill in a glaring gap in their product lineup, it also puts them in direct competition with Alibaba’s Sesame Credit.

 

According to previous screenshots from early testers, the credit scores—ranging from a maximum of 850 points and a minimum of 300 points—were calculated from five indexes: social connections, security, wealth, the ability to honor an agreement, and consumption behavior.

 

Social data constitutes a major part of Tencent Credit’s rating system. The data collected from WeChat and QQ—which claim 900 million and 860 million monthly active users respectively. The consumption data was mainly gathered through Mobile QQ and WeChat payment.

 

Tencent is also partnering with financial institutions like WeBank, China Construction Bank and local service institutions for complementing the credit rating mechanism.

 

Both Alibaba and Tencent have set early sights on the credit scoring sector, an essential component for financial services to solve the rising online security issues by leveraging big data. In 2014, when Alibaba’s Ant Financial was tinkering on Sesame Credit, Tencent also laid out in the sector with plans to launch a similar product. Both the companies obtained government approval to run their consumer credit rating services two years ago. 

 

Tencent has applied for a license in Malaysia to offer local payment services via its WeChat Pay, reports Reuters.

 

If approved, users in Malaysia will be able to link their local bank accounts to WeChat Pay and pay for goods and services in ringgit.

 

WeChat Pay and Alibaba Group’s affiliate Alipay are turning China cashless by enabling payments or money transfers via code scan.

 

The pair are also expanding internationally in tandem with outbound tourism, getting more businesses to accept their services which allow users to make payments using bank accounts in China without complications posed by currency exchange.

 

Licenses for such cross-border payments differ from those required for local payment services. Hong Kong is currently the only location outside mainland China where WeChat Pay and Alipay offer payment services executed entirely in the local currency.

 

Alipay introduced a separate app for the Hong Kong market in May, its first non-yuan payment app.

 

Planet Payment and ACI Worldwide has announced the launch of SecurePlus that enable the acceptance of Union Pay cards online.

UnionPay is a bank card association, with over 6.5 billion cards issued worldwide, having over 38 billion transactions on cards in 2016.

SecurePlus allows the acceptance of both credit and debit cards without a re-direct to a UnionPay Hosted Payment Page. This can cause friction due to internet issues, Chinese fire-wall, browser issues, timeouts, etc., resulting in decreased approval rates.

The solution also supports transaction tokenisation and recurring payments, and can offer protection from fraud chargebacks, a significant concern for merchants selling cross-border. Merchants will also be able to price and sell goods in multiple currencies, such as Chinese Renminbi, Hong Kong Dollars, US Dollars and Singapore Dollars.

Kapronasia and CANCAN have released a new survey on the spending habits of Chinese nationals when traveling abroad.

 

As China’s economy continues to grow, more and more nationals are traveling abroad bringing with them their spending habits. In China, Alipay and WeChat Pay have become the payments methods of choice for a majority of consumers and tourists expect the same convenience when traveling abroad.

 

The report highlights the growth in the number of overseas Chinese tourists, which reached 122 million in 2016, an increase of 4.3% over 2015 and the potential these numbers could have for merchants who support mobile payments.

 

Spending habits have also changed, the survey shows. If in the past Chinese tourists bought mainly luxury items when traveling abroad, now retail purchases are more common. Most tourist spent between USD 393 and USD 786 for retail purchases on their most recent trip, while 5.7% spent more than USD 6,288. During their travel, China’s overseas tourists spent $109.8 billion, or $900 per person on average in 2016.

 

Mobile payments is a preferred payment method, with 67% of respondents reporting that they use Alipay or WeChat Pay for overseas purchases. This represents about 41% of overseas consumption and tourists used mobile payments for more than 10% of total transactions.

 

 

Merchants too are responding to these changes as 80% of respondents cited consumer demand as one of the main reasons for adopting mobile payments. Furthermore, 70% of respondents said that mainland Chinese consumers were their largest source of global revenue, further highlighting their importance.

 

Chinese consumers are most likely to use mobile payments for clothing, followed by makeup and skincare, and food and beverages. Travel related ticket purchases and hotel accommodations also ranked high amongst the categories consumers were most likely to pay for with mobile.

 

The survey shows that mobile payments are an increasingly popular payments method for Chinese citizens traveling abroad and as transaction values for mobile payments are expected to increase, merchants have to be aware of these changes and adapt accordingly.

 

For this survey, Kapronasia and CANCAN have interviewd 1000 Chinese consumers abroad and 60 global merchants.

 

 

 

Google has announced that Android Pay will be available in five new markets: Taiwan, Spain, Brazil, Russia and Canada.

 

So far, Google has officially confirmed that Android Pay is launching in Taiwan. Furthermore, the company unveiled plans to expand its mobile payment app to Canada, Spain, Brazil and Russia.

 

Russia media reports that Android Pay will be available at the following banks: Sberbank Rossii, Alfa-Bank, Raiffeisenbank, and Tinkoff Bank. Android users, which account for 87% of the total smartphone market in Russia, according to XDA, will be able to make mobile payments using the NFC at these banks.

 

Google has not confirmed which banks will support Android Pay in Canada, Spain and Brazil.

 

 

Alipay to launch in the US

By on May 12, 2017

 

Alipay, the mobile payment system offered by Alibaba, has announced is coming to the US, thanks to a deal brokered with First Data.

The expansion follows limited trials in California and New York, and will bring Alipay into direct competition with Apple Pay, Android Pay, and PayPal. Alongside online payments and money transfers, Alipay users can also hail a taxi, book a hotel, and buy movie tickets directly from within the app.

The partnership will allow Chinese tourists who visit the US to use their mobile phones to complete transactions at 4 million merchants and retailers around the country.

Alipay has about 450 million customers worldwide, but Alipay’s deal with First Data aims to offset the mobile payment’s loss of ground in China.

Is Malaysia Ready to Go Cash-Free?

By on February 19, 2017

A Cash-Free Future

Think about the last time you carried a wad of cash to go shopping –we’re willing to bet that it’s been a while. Nowadays, all you need is to pack plastic; a debit or credit card and only a bit of spare cash, just in case. Even mobile payments are catching on with offline merchants.

Going cashless is relatively safer, convenient and what’s more, every cent spent can be tracked. Furthermore, without cash at checkout points, fewer errors can be expected where cashiers incorrectly return change.

But still, even with all these positive points and a push from Bank Negara Malaysia, are we really ready to go completely cash-free? To answer this question, let’s first look at our cashless options:

 

1. Bank Cards

Debit, credit and prepaid cards are the most commonly accepted and used cashless payment options in Malaysia. In recent years, debit card usage has spiked, with approximately 44 million.pdf) cards (as of 2013) in circulation. This means that when compared to the population in the country, about 1.5 debit cards has been issued for each person.

 

2. Mobile Transactions

Online merchants have equipped remittance systems to allow for checkouts and payment from smartphones. Even local offline merchants have incorporated mobile banking facilities as well, although in smaller numbers.

 

3. Contactless Payments

New tech has equipped payment cards and smartphones with contactless payment features such as Visa payWave and MasterCard® Contactless. These features speed up the checkout process; sans the need to count coins and paper money. It’s also rather convenient as you don’t have to run to the ATM as much to withdraw cash for small payments.

 

4. Prepaid Cards

Cards preloaded with cash like the Touch ‘n Go Zing card can be used for more than just highway tolls (which is to go fully cashless by 2018). Use it to pay for “public transport, carparks, petrol, retail chains, restaurants and healthcare”. Visa and MasterCard prepaid cards are also available for use at many more merchants.

 

5. Virtual Money

Digital currency and Cryptocurrency such as Bitcoin are not recognised as legal tender in Malaysia just yet, but locals are still using it. A petrol station in Jalan Raja Chulan started accepting bitcoins for payment in 2014, in addition to a VPN service and boutique café in Taman Tun Dr Ismail.

 

Barriers to a Fully Cashless System

Even while all these payment options are available to Malaysians, there are a couple of obstacles that need to addressed before we can truly go cashless.

  • Not Accepted Everywhere

At present, the cashless option as a payment method isn’t available everywhere. Have you tried paying for your teh tarik and roti canai at the local mamak? It probably won’t work. Apart from these small-scale operators, even certain fast-food joints, convenience stores and health clinics are still only accepting cash.

In fact, usage of cashless options appears to be focussed in city areas and within larger retail establishments. Thus, even if Malaysian consumers are equipped with cashless payment articles; vendors and merchants will need to adopt the system before we fully (or mostly) go cashless.

  • A Cash Mindset and Trust Issues

While it appears that the majority of Malaysian consumers are embracing cashless systems, it is possible that usage is confined mostly to those in the capital, major cities and towns.

Denizens of rural areas and outskirts of Malaysia are still very much dependent on cash. And even as numerous cashless payment options are available, changing mind sets and addressing trust issues apparent with cashless systems is going to take time.

Riding the Cashless Wave

If you’re ready to join the cashless world, note that one of the best cashless options currently available is still your credit card. This is because it has numerous fraud protection protocols in place, especially when shopping with overseas online merchants and is often accompanied by special perks.

amazon_paypal

Amazon and PayPal have discussed the possibility that the online retail company to support PayPal payments at checkout.

Amazon offers credit and debit cards, gift cards, and Amazon.com store cards as payment methods. Customers can also link their checking accounts to the site to make quick purchases.

PayPal grew to 197 million active users at the end of 2016. According to the company’s data, each of those accounts averaged 31 transactions in the preceding 12 months.

Amazon Payments can be used by merchants to facilitate payments, and by customers to make those payments. In many cases, the merchants that use Amazon Payments to facilitate purchases also offer customers PayPal.

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Facebook has obtained an e-payments license from the Central Bank of Ireland, signalling that the ability to pay people through the Messenger app (already available in the US) could soon be coming to Europe.

 

The Central Bank of Ireland’s approval of the payments license was authorised to Facebook Payments International Limited (FBPIL) in October 2016 for “e-money issuance” and “payment services.” TechCrunch reports, cited by businessinsider.com. As a member of the European Union, passporting rights mean that the Irish license would apply throughout the other 27 EU member states.

 

Currently, the payment service only works in the US. It allows customers to send money to friends via the Messenger app, a feature which it has recently been promoting. It has been reported that the social network will soon be adding payments to businesses, as well as friends, via the app.