22 March 2019

Why Ping An is the next big thing in mobile payment

Mobile payment in China will top 800 billion yuan (US$31.3 billion) this year, a fivefold increase from 2012, according to an official think tank.

Internet companies and financial institutions are doing all they can to make sure they don’t miss any of that.

But some of them are better placed than others. First-movers such as Alipay, the mobile payment service of internet giant Alibaba Group, have the upper hand.

Alipay commands nearly half of the third-party payment market in which more than a third of deals originate from handsets.

It faces competition from Weixin Payment, a unit of  Tencent Holdings Ltd. (00700.HK). By embedding the payment service in WeChat, Tencent’s popular social networking app, Weixin Payment has racked up impressive numbers worthy of Alipay’s 100 million-strong user base.

Not to be denied is Ping An Insurance (02318.HK, 601318.CN) which is preparing to launch mobile e-wallet in early 2014.

Although the insurer is a latecomer, it has great potential and could be instantly a credible challenger to Alipay and Weixin.

However, unlike Alibaba and Tencent, Ping An does not have e-commerce or wireless communications technology. The insurer does have an advantage over its rivals — it owns a portfolio of operating licenses, Economic Information Daily reports

China’s financial market is far from being open to competition. The government’s stringent licensing regime allows competition only in the same segment. For instance, lenders and insurers are not allowed to compete against each other.

Ping An is a notable exception. The company holds full licenses for banking, underwriting and fund business.

On the strength of these licenses, Ping An has a strong chance of overtaking Alipay and Weixin by offering value-added services to its upcoming mobile payment solution.

By contrast, Alibaba and Tencent will continue to rely on banks and fund houses to provide third-party payment services to mobile users.

– Contact the writer at [email protected]



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