Cross-border payment industry barriers
From the perspective of the industry structure, the barriers to cross-border payment licenses are weakening, and the payment service models provided by different payment companies are also differentiating. In terms of competitive barriers, whoever can truly improve industry efficiency and better meet the comprehensive needs of cross-border sellers will gain the upper hand in future competition. Compared with the single collection fee competition, such competitive barriers are solid and benign and sustainable.
Compliance barriers
First, whether the payment company is licensed in each country where the business is located and whether it understands the relevant financial regulations; second, whether the system can support the business
Global expansion, complete compliance, risk control, anti-terrorism and anti-money laundering work.
Core technology barriers
Cross-border payment has extremely high requirements for system stability, security and risk control. It is necessary to have the development technology of core and supporting value-added service applications, and at the same time, it is necessary to have the ability of continuous research and development innovation to meet market demand.
Industry access barriers
To operate cross-border payment business, it is necessary to obtain the People’s Bank of China’s “Payment Business License” and the cross-border foreign exchange payment license approved by the State Administration of Foreign Exchange.
Capital barriers
Payment photography requires a minimum registered capital of RMB 100 million. The payment industry has obvious economies of scale, and the transaction volume must reach a certain scale to achieve a break-even point. With the rapid development of payment institutions, customers’ requirements for the efficiency of fund settlement have further increased their demand for funds.
Brand barriers
Payment services involve the financial security of upstream and downstream users, so a good brand and reputation are often the factors that users focus on when choosing a payment service provider.
Evolution of the cross-border payment market Cross-border payment 1.0
Foreign payment companies dominate the cross-border payment market;
Typical characteristics:
(1) 2-3% high payment service fee rate;
(2) Companies dominate the market and sellers have no choice;
Cross-border payment 2.0
The rise of domestic cross-border payment companies, a typical representative: Lianlian Payment;
Typical characteristics:
(1) 1% fee rate, lowering the industry fee level;
(2) Payment licenses set industry entry barriers;
Cross-border payment 3.0
Domestic cross-border payment has entered an era of flourishing development, with 30-40 cross-border payment companies;
Typical characteristics:
(1) Fees are further reduced to 0.5-0.7%;
(2) Focus on brand building and provide differentiated value-added services;
(3) Collection + software service system;
Cross-border Payment 4.0
Enter the seller’s value chain and provide more value-added services to make cross-border payment more efficient and simpler;
Typical features:
(1) Transformation from cross-border payment to service chain;
(2) Service added value becomes the key to enterprise breakthrough;
(3) Build a comprehensive cross-border e-commerce service platform;