Chinese Payment Firms Expand Cross-Border Services Significantly

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Cross-border payment services are rapidly expanding among Chinese payment companies, maintaining strong double-digit growth in both merchant client numbers and transaction volumes despite a slowdown in the domestic market.

Lakala Payment, the first major online payment platform to launch publicly in mainland China, reported a 78% increase in cross-border transactions over the three months ending September 30 compared to the previous year. The number of vendors utilizing its services grew by 72%, though its overall profit and revenue declined by 34% and 7.3%, respectively, during the same period.

Newland Payment Technology highlighted in its latest earnings report that sustained growth in its cross-border operations was a key factor driving profitability in the first nine months of the year. Based in Fuzhou, the company is preparing to go public in Hong Kong, aiming to use the funds to develop a global network and obtain overseas licenses.

Industry experts believe that growth opportunities within China’s domestic payment space are limited, while profit margins for cross-border services tend to be considerably higher, prompting many providers to explore overseas markets.

Smaller and medium-sized Chinese payment firms are accelerating their international expansion efforts. For instance, Yizhifu, a platform under the world’s largest small commodity wholesale market in Yiwu International Trade City, experienced a 35% increase in cross-border payments during the first three quarters of this year.

However, this growth comes with risks, warns Pan Helin, a member of the Ministry of Industry and Information Technology’s expert advisory committee on the information and communications economy. Cross-border payments primarily involve two core areas: supporting Chinese companies’ foreign trade and outbound investments, which requires strict compliance and risk management; and operating in local payment markets overseas, which demands mastery of emerging technologies like digital currencies and artificial intelligence, along with adapting to local payment customs.