Third Party Payment Survival Concerns: Coherence to Bank Benefits

The third anniversary of the third-party payment is "The future prospects are excellent, but the days are sad."

Since May 26 last year, the central bank has issued third-party payment licenses for more than one anniversary. The issuance of payment industry “passes” has led the industry to an explosive growth period. Today, there are reports that the fourth batch of third-party payment licenses will be issued in the coming days, and the number is also "frightening."

In the eyes of everyone, those companies that have already obtained permits can seem relaxed. However, with the licensing system, the number of licensed third-party payment companies has also risen sharply. More and more concerns have been expressed. Businesses willing to cooperate have started to pick and choose, and the commissions they can get are getting more and more. Low, from time to time, we have to look at the bank’s "face" to act.... Fortunately, although the days are sad, but each is also groping for the various ways of living, maybe, some innovative, revolutionary financial reforms, It sprouted at this time.

Prepaid card issuance: There are "unlicensed merchants" after the "national team"

“We thought that after we got the license, our days would be much better and we felt that with qualifications, many things would be easier to handle. In reality, it seems that the survival situation is similar to that of the past. It is neither good nor bad, and competitors are not reduced.” When meeting a reporter, Mr. Chen, a vice president of a large-scale prepaid card company in Shanghai, fell back. The original intention of issuing licenses did not seem to be the same as they thought. Originally, he thought that there would be a batch of prepaid cards issued after the deadline set in September last year. The company was stopped outside the gate. As a result, the central bank did not have any measures to strictly restrict those companies that did not get a license. Now that unlicensed companies are getting more excited, Mr. Chen’s company is controlled by the central bank because it has obtained a license. At the time, it was a little bit cramped.

Mr. Huang, who works in a large-scale public institution, recently felt that the unit did not seem to have issued a consumer card for a long time. This was a problem that made Mr. Chen even more troubled. “Every industry has its own regulations, and it is also reasonable for the central bank to make regulations on issuance of cards. Now the main customers of most prepaid card companies are public relations companies, agencies, enterprises and institutions, mainly because prepaid cards can be used for various purposes. Invoices can be used as gifts, can be issued benefits, but also avoid tax, but now the country has made a lot of restrictions on the unit to buy prepaid cards, and some units have not even come to buy a card." Mr. Chen said that the relationship is good Some big clients told him privately that they were not allowed to buy. Although there was no clear policy or document, they were only internal announcements. However, for card issuers, they actually lost a lot of big customers.

The other reason for the loss of users is the participation of “national teams” in the prepaid card industry, which is more popular than prepaid cards issued by enterprises. These are prepaid cards issued by banks. Such cards are equivalent to “cannot be cashed. The bank card, as long as there is a POS machine can be used, and its value is more reflected in the transaction with the cattle. "The average business prepaid card and cattle trade is probably 7% off, and the higher ones are 98% off. The bank's prepaid cards can generally reach 99%, and if the amount is large, it can hit 99.5% if consumers can choose banks. Prepaid cards will definitely not be selected for prepaid cards," said Mr. Chen.

Mr. Chen believes that the country does not strongly support the development of the prepaid card industry, or even restrain the industry. “We rarely see ads from a prepaid card company, and most prepaid card companies are low-key because the prepaid card industry is always associated with some grey interests in people’s concepts. Once you’ve got a high profile, someone will come I am looking for you,” said Mr. Chen, who is now in the winter of the prepaid card industry, and it is estimated that it will take a long time to usher in the spring.

Now, what Mr. Chen’s company can do is try to issue as many name cards as possible, and try not to touch the grey area.

PSO Laying: Lower commissions for higher commissions

Precipitating funds and collecting special merchant commissions are two important sources of revenue for prepaid card companies. In theory, the commission charged by UnionPay cards to large supermarkets is generally 0.3%, shopping malls are 0.9%, and catering enterprises are 1.8%. As the prepaid card is more conducive to the sales of special merchants, the commission that should have been collected should be higher than that of the UnionPay card. However, the current situation is not the case. Wang Jie, vice president of Shanghai Duoyi Information Technology Co., Ltd., revealed to reporters that the current commission has already shown up. Not only this trend of decline, but some large companies also said that if the annual sales can not reach a certain degree, "no commission".

Mr. Luo, the person in charge of a prepaid card issuing company in Chengdu, is fully expanding his business and wants to distribute his POS to more outlets. However, he found that the requirements of merchants are getting higher and higher. "The merchants pay great attention to the amount of cards issued. If the number of cards issued is not large, they will charge management fees to the issuing companies as a cost for maintaining and managing the equipment. This is unacceptable for some less-known prepaid cards. The amount of cards issued is not large. I hope that I can build more outlets and earn a little more commission. Now, the burden on light costs is very heavy." Mr. Luo sighed.

Wang Jie also told reporters that after the merchant’s store installed the Zhifutong machine, the cost of operation and maintenance was very high. “Yuanfutong is mostly installed in restaurants and shopping malls. The staff in these service areas are highly mobile and often trained well. A group of employees will soon leave and new employees will not be able to use it. Once they encounter a user who wants to use a POS machine, they will say 'bad' or simply say 'no', causing the loss of users. So in each area Inspectors are set up and regularly inspected.”

The reporter learned that prepaid cards now also have entry fees for merchants to enter. “The problem of entrance fee is mainly reflected in the convenience store. We once talked to some convenience stores. They asked to pay a part of the deposit first, which is about 100,000. Other fees are calculated separately, and the margin is equivalent to Fees.” Wang Jie told reporters, but some merchants will look at the head, if it is a well-known big companies, may make concessions, after all, the large number of people issuing cards, can bring a large amount of transactions.

Luo told reporters that he also encountered such a thing, "On the one hand, the commission is lowered, on the other is a high margin, and there are equipment maintenance and labor costs, and profits are getting less and less."

However, Wang Jie believes that this is also understandable. For merchants, this is also an alternative means of competition. Whoever can bring more benefits to it will be able to move in.

“Although the threshold for paying the industry license is very hard, it still has to face various kinds of hurdles after entering the market. For prepaid cards, if the amount of cards issued is not large, it will be difficult to survive in this market.” Mr. Chen analysis.

Survival Hidden: Attached to the bank may be overwhelmed

In the market for third-party payments, there is a chain of interests that involves all parties. Banks, UnionPay, companies, businesses, and users, in the words of Wang Jie, must treat each other's relations well. Not long ago, the news that Lacala and Qian Bao were blocked were overwhelming. Although the official stated that the transaction problem originated from equipment failure, it was an indisputable fact that more than 100,000 users were involved. Remittances to the world’s relevant staff told the reporter that the interest coordination of all parties in the industry chain has been a major obstacle in the development of third-party payments, and it is the case now and in the future.

“Now our cooperation with the bank is smooth because our customers are also customers of the bank. However, the negotiations with the banks were also stressful before and we were always worried about what would happen if the bank took the offensive one day. “Mr. Li, a person in charge of a payment company in Shenzhen, told reporters that because the third-party payment company and the bank may have differences when it comes to profit sharing and other issues, and if the differences cannot be resolved, the injured party will always be the third-party payment company. .

Mr. Li's concerns are not unreasonable. During the two sessions this year, Zhao Yuzheng, general manager of the China Construction Bank Credit Card Center, bluntly stated that the third-party payment companies have many problems such as chaotic management, illegal operations, vicious fights against the market, normal payment order, and frequent risk events. This has clearly demonstrated the dissatisfaction of the banking industry with third-party payment companies.

Mr. Li told reporters that the bank’s sense of crisis is now growing stronger. On the one hand, it may be due to the growing number of third-party paying legions. On the other hand, the third-party payment companies are also increasingly involved. For example, before the fund sales license issued, many third-party payment companies were acquired, which in turn grabbed a bank's business. Mr. Li felt that some banks had been able to block certain third-party payment companies to a certain extent as a "warning."

Analyst Zhang Meng, an analyst at Analysys International, told the “IT Times” reporter that at present, most payment companies do payment and liquidation through China UnionPay’s channel, and the clearing channel is “Payment Company-Union-Bank”, which is a one-way channel. As long as there is an interruption in this link, the channel will collapse. "If the UnionPay or the bank broke the channel, there is basically no salvageable countermeasure for the third-party payment company," said Zhang Meng.

Mr. Li told reporters that although they also brought in bankcard usage, in order to maintain a good relationship with UnionPay and banks, they usually had to suffer a loss. “For example, when the service fee is allocated, it will give the bank a little more In the long run, this is worth paying for.

Reporter's notes

Every company has its own way of life

In a seemingly beautiful third-party payment market, there are surging flows hidden on the calm surface of the sea.

However, during the interview, the reporter found that although many companies have expressed fierce market competition and are facing various difficulties and bottlenecks in their development, they all have their own way of living.

Shande, will load a variety of functions on the card, such as points, consumer incentives, etc., to help merchants retain customers; means pay pass, to do accurate marketing to merchants, the business discounted information targeted to the user, and then according to The actual number of people going to spend will receive 3% to 5% of the marketing commission; fast money, aiming at enterprise users, providing integrated financial information Solutions to help users improve the cash flow rate, and users hope that fast money can be The slogan "Use one dollar for two dollars" was raised to "Use one dollar for three yuan."

Although each move is not the same on the surface, its essence is the same—innovation, how to use product innovation to avoid homogenous competition is a problem that many third-party payments are considering and exploring. In order to get rid of the current difficulties, enterprises need to move from a single profit model to an innovative and diversified profit model. And those companies that have not yet obtained a license can't just focus on the “pass”, and their own internal strength is the biggest “base stone” for company development.