Currently, the coverage of cross-border payment in my country is relatively wide, and the development of various industries is relatively balanced, with no industry with a particularly large proportion. Although cross-border e-commerce has developed rapidly in recent years and has become the largest market for cross-border payments, its share of cross-border payments has only reached 25%, which is not much different from the three major categories of hotel accommodation, overseas education and air tickets that follow closely behind. These four types of businesses together account for about 80% of the market share. In other words, the current cross-border payment market is mainly concentrated in the service industry and cross-border e-commerce business. As mentioned above, these two rapidly growing businesses have put forward higher requirements for cross-border payments.
Traditional international bank settlements and small remittances cannot provide suitable solutions for these two major business sectors in terms of technology and services. Therefore, the third-party payment companies that have emerged in recent years have been given the opportunity to show their strength. Speaking of third-party payments, people’s first reaction is to think of Alipay and Tenpay. Will they once again share the market in the field of cross-border payments?
Indeed, the domestic online payment market is increasingly showing a pattern of two strong competitors. Alipay and Tenpay occupy nearly 90% of the market share, which has greatly compressed the living space of other third-party payment companies.
However, due to the complexity and diversity of the cross-border business market, the two giants with e-commerce scenarios or user advantages do not have the huge advantages in cross-border payments that they have in the domestic online payment market. For example, in cross-border e-commerce, the importance of supply chain capabilities is not inferior to that of platforms and users. Although Alibaba has platform and user advantages, its Tmall International has not been able to establish an absolute leading position.
Tmall International ranks first in market share, but it is only a little more than 20%, and has not distanced itself from other competitors such as JD Global Shopping and NetEase Kaola, and they are extremely stalemate with each other. This makes Alipay’s idea of expanding through Alibaba’s large platform advantage fall through. Based on its social advantage, Tenpay has seized and cultivated mobile payment habits with high-frequency applications and accumulated a large number of C-end users. However, in the face of a wealth of cross-border business scenarios and payment industry chains, such as bank acquisition, international settlement, currency exchange and other links, there is obviously more room for exploration and expansion, and these links contain huge market value to be developed. The inadequacy of traditional payment methods in responding to market changes and the difficulty of exerting the advantages of online payment giants have given other third-party payment companies the opportunity to show their strengths. They do not have any advantages over the giants in the 2C market, but they are on the same starting line as these giants in the 2B business.
Due to scale costs and organizational structure, other third-party payment companies may be more flexible and have cost advantages than the giants. Therefore, some powerful manufacturers rely on their own technology and service advantages, provide industry solutions or customized services, keep a close eye on the more profitable 2B business, and try to obtain the most valuable part in the cross-border payment market.