The diversified development of RMB cross-border payments is of great significance for both RMB internationalization and industry giants expanding overseas markets. Under the policy of keeping the total number of domestic payment licenses unchanged, how can "entrants" in the logistics industry find new breakthroughs to layout new markets?
On April 28th, a reporter from Huaxia Times learned from Zhongtong Payment Co., Ltd. (hereinafter referred to as "Zhongtong Payment") that Zhongtong Payment completed the filing of cross-border RMB payment business on April 22nd. This is also the first legal person payment institution in Guangxi to complete the filing of cross-border RMB payment after the release of the Notice of the People's Bank of China on Supporting Cross border RMB Settlement in New Foreign Trade Formats (Yinfa [2022] No. 139).
It is worth mentioning that the completion of the registration of Zhongtong Payment marks another progress in the field of RMB cross-border payments by Zhongtong Payment since it obtained the payment license through the acquisition of Wantong Payment Curve in July 2023.
"The successful filing of cross-border RMB payment business by Zhongtong Payment is conducive to further integrating existing RMB cross-border payment settlement channels and resources, better targeting the demand of the cross-border payment market, and providing one-stop comprehensive cross-border payment service solutions for cross-border e-commerce, import and export trade enterprises, etc. It is also a further response to the national strategic goal of RMB internationalization and meeting the needs of more enterprises for RMB cross-border settlement." Zhongtong Payment related personnel told Huaxia Times reporters.
Zhongtong Cross border Payment Achieves Success
In the stock payment license market, Zhongtong is the only express delivery giant to obtain payment licenses, and the other is SF Express, while Yuantong Express is actively seeking licenses. However, in the eyes of industry insiders, the path for Zhongtong Payment to obtain a license is relatively winding. However, after obtaining the license, it has been smooth in its layout of RMB cross-border payment business.
According to the public data, the Zhongtong payment license is the national Internet payment license held by the original Wantong payment and the qualification for issuing and accepting prepaid cards in Guangxi, Guangdong and Yunnan provinces. In October 2022, Shanghai Zhandi Technology, the controlling shareholder of Wantong Pay, pledged its 40% equity and derivative interests in Wantong Pay to Shanghai Qijiang Information; In July 2023, the People's Bank of China officially approved the renaming of Wantong Payment Co., Ltd. to "Zhongtong Payment Co., Ltd.", with the main investor changed from Shanghai Zhandi Information Technology Co., Ltd. to Shanghai Qijiang Information Technology Co., Ltd. The actual control is carried out by the natural person Lai Jianchang through Shanghai Zhongtong Digital Business Services Co., Ltd. Among them, Shanghai Qijiang Information is a wholly-owned subsidiary of Zhongtong Technology. Although Zhongtong Technology is not directly related to logistics company Zhongtong Express in terms of equity, its legal representative, actual controller, and executive director, Lai Jianchang, is the vice president of Zhongtong Express.
"The payment license is an important step for Zhongtong Express to improve its financial landscape. Zhongtong Express has obtained multiple financial licenses, including small loans and commercial factoring. In recent years, its actions in the financial field have been continuous, and it has also created Zhongtong Express, Zhongtong International, Zhongtong Commercial, and Zhongtong Financial sectors, forming the Zhongtong ecosystem. The development of cross-border business undoubtedly adds wings to Zhongtong's domestic and foreign RMB payments. In the current situation of various institutions in the RMB cross-border payment field working together, logistics giants building their own cross-border payment channels is equivalent to further expanding the path of RMB cross-border payments." Zhao Xiaomin, an expert in express logistics, analyzed this.
Some market insiders have also observed that for cross-border enterprises, the service qualification of Zhongtong Payment will help more enterprises "go out", greatly promote the expansion of their overseas business, help them accelerate the speed of capital flow, achieve the "three streams" of cross-border transactions, including capital flow, order flow, and logistics, and further enhance international competitiveness.
"At present, Zhongtong Payment has preliminarily reached cooperation intentions with international logistics enterprises, cross-border e-commerce platforms, etc., committed to providing cross-border payment solutions for enterprises, and also providing cross-border fund collection, remittance, settlement and other payment services for cross-border e-commerce platform buyers, logistics companies, etc." The person in charge of Zhongtong Payment mentioned above revealed.
In fact, according to the reporter's understanding, Zhongtong Pay's cross-border business is located in Nanning, Guangxi, which has a high degree of connection with its original business; On the other hand, local governments have also provided more policy support to Zhongtong Pay.
Specifically, with the special promotion and support of the Nanning Wuxiang New Area Management Committee, on March 28th, the construction of the Zhongtong Payment New Retail Smart Industrial Park project, which covers an area of about 80 acres in Nanning Wuxiang New Area, began. The construction of the Zhongtong Payment landing scene is actively advancing, and the joint venture company formed by Zhongtong Payment and relevant parties has entered the registration stage. Zhongtong Payment's cross-border payment business is also rapidly and orderly advancing, and it will actively expand its cross-border e-commerce payment business to ASEAN, creating a one-stop cross-border service of "transaction+logistics+service".
"In the future, Zhongtong Payment will be based in Guangxi, relying on its geographical advantages, deeply cultivating the ASEAN region, continuously creating rich cross-border RMB business supporting products and services, steadily promoting the cross-border circular use of RMB in trade settlement, direct investment, and financial market transactions, and continuously empowering real economy enterprises such as cross-border e-commerce and foreign trade enterprises. At the same time, Zhongtong Payment will vigorously develop local businesses, actively participate in and jointly promote the rural financial reform 'Tiandong model', promote the construction of six major financial service systems, and help Guangxi accelerate the construction of an agricultural strong zone." Zhongtong Payment stated.
Cross border payment competition is becoming increasingly fierce
Behind the rapid entry of Zhongtong Payment into cross-border payments is the rapid development and increasingly fierce competition of RMB cross-border payments in China.
If ten years ago, the cross-border flow of RMB was still dominated by banks, then with the issuance of payment licenses and the entry of overseas payment institutions, this pattern has long been broken. Some overseas payment institutions are using the advantages of globalization to enter the domestic market; some domestic payment institutions are using the huge traffic stickiness to only bind customers; and some payment institutions are vertically cultivating in the foreign trade field and collaborating with overseas payment institutions to expand the market. Cross border trade, cross-border e-commerce, cross-border remittance, and so on cannot bypass the channels of cross-border payment. Especially, more and more domestic enterprises are expanding overseas markets through cross-border e-commerce channels, seeking new business development space. However, at the same time, many domestic enterprises eager to expand their cross-border e-commerce business and open up overseas markets still face challenges such as high threshold for opening accounts with overseas banks, high bank fees, and lack of high-quality services. In recent years, the laws, regulations, and financial regulatory requirements of different overseas jurisdictions have become increasingly complex, and domestic enterprises' cross-border e-commerce journey has also become under heavy pressure On April 29th, a senior figure in the payment industry told a reporter from Huaxia Times.
The cross-border business development of Zhongtong Payment also demonstrates its further extension in its main business. The relevant person in charge of Zhongtong Payment mentioned above stated that Zhongtong Payment will further implement national policy guidelines, respond to government calls, strive to grow and strengthen, and continue to provide more comprehensive, convenient, and secure cross-border payment products and services for local cross-border enterprises, helping to promote the healthy and high-quality development of new cross-border foreign trade formats.
According to the business data in the 2023 annual report of Zhongtong Express, it achieved a business volume of 30.2 billion items last year, a year-on-year increase of 23.8%, and expanded its market share by 0.8 percentage points. The company expects that the total number of packages in 2024 will be between 34.73 billion and 35.64 billion, with a year-on-year growth of 15% -18%.
From the daily scenarios of express delivery business, both internally and externally, there are a large number of payment demands involved. For C-end users, sending parcels, returns, etc. all require payment; for B-end users, merchants also need to pay for sending parcels. Obtaining their own payment license for express delivery companies has at least two benefits. Firstly, it reduces payment costs; secondly, it connects information flow and establishes an information loop. However, according to the annual reports of listed express delivery companies in Shanghai and Hong Kong, the gross profit per item in the domestic express delivery market is far lower than that in the Southeast Asian market, which also means that there is still high growth space for the Southeast Asian express delivery business market. Therefore, it is important for express delivery companies to enter the Southeast Asian market first in cross-border payment business. In general, it is clear that opportunities have been targeted Express delivery industry expert Gong Fuzhao analyzed and stated.