Following the central bank’s announcement of the renewal of the first two batches of non-bank payment institutions in August and September this year, on December 20, the central bank announced the renewal results of the third batch of payment licenses, of which 52 companies successfully renewed their licenses, 1 company was not renewed, and 2 companies’ businesses were merged. This continues the central bank’s previous attitude of tightening payment licenses. Industry insiders believe that under this trend, the value of existing licenses will become higher and higher.
52 companies renewed their licenses in the third batch
According to the announcement issued by the central bank on December 20, 52 companies including Tianyi E-Commerce Co., Ltd., China Unicom Payment Co., Ltd., China Mobile E-Commerce Co., Ltd., and Shanghai Dianbaiqu Information Technology Co., Ltd. successfully renewed their licenses, with a renewal period of five years, from December 22, 2016 to December 21, 2021.
However, Shanghai Tongka Investment Management Co., Ltd. did not obtain a renewal this time due to the non-renewal situation stipulated in Article 6 of the “Notice of the People’s Bank of China on the Renewal of the “. According to the notice, Article 6 stipulates that “deliberately circumventing regulatory requirements by means of forging, altering, concealing data, etc., or maliciously refusing or obstructing inspection and supervision.”
In addition, the business licenses of two payment institutions have been merged. One is the payment business of Hainan Island Yikatong Payment Network Co., Ltd., which will be merged to Guofubao Information Technology Co., Ltd.; the other is the payment business of Wenzhou Zhimin Information Service Co., Ltd., which will be merged to Shanghai Dianbaiqu Information Technology Co., Ltd. The central bank requires that the relevant payment business takeover work should be completed before June 21, 2017.
So far, among the 270 payment business licenses issued by the central bank, four companies, including Guangdong Yimin, Zhejiang Yishi, Shanghai Changgou and Beijing Runjing, have had their payment licenses revoked, and 10 have had their payment business licenses merged in three batches of renewals, leaving only 256 payment licenses in the market.
Supervision continues to be “cold face”
Since the beginning of this year, the central bank has launched a series of heavy blows on the supervision and rectification of third-party payment institutions. The intensive policy releases and the continuous voices of rectification, punishment, and regulation are all demonstrating the determination of the regulatory authorities to regulate the payment industry.
In addition to canceling, merging and not renewing some payment licenses, the central bank’s “cold face” is also reflected in the narrowing of some institutions’ payment business. Among the 52 licenses renewed this time, the business scope of two companies was reduced.
One is based on the “Notice of the People’s Bank of China on the Sampling of Bank Card Acquiring Outsourcing Business”, Modern Financial Holdings (Chengdu) Co., Ltd. was ordered to stop the bank card acquiring business in Jilin and Qingdao; the other is based on the “Notice of the People’s Bank of China on the Sampling of Bank Card Acquiring Outsourcing Business”, Shanghai Deyi Network Technology Co., Ltd. was ordered to stop the bank card acquiring business in Anhui and Qinghai.
In fact, in the previous two batches of renewal decisions, some payment institutions had their business scope reduced due to serious violations, stagnant business and shrinking business. Huang Zhen, director of the Institute of Financial Law of the Central University of Finance and Economics, said that it can be seen that the central bank still has a trend of tightening supervision, and the regulatory authorities are still strengthening their control and rectification of the payment industry.
The survival of the fittest in the industry has intensified
After some third-party payment institutions were “derailed”, there were also a number of institutions that developed healthily, and the types and scope of licensed businesses were maintained and continuously expanded. In this renewal decision, Shanghai Dianbaiqu Information Technology Co., Ltd. and Guofubao Information Technology Co., Ltd. both added prepaid card issuance and acceptance businesses in different provinces. Previously, the business types and scopes of third-party payment companies such as Alipay and Lakala had also been expanded. The survival of the fittest in the industry has become more and more obvious. Some industry insiders also said that the third-party payment market was actually destined from the beginning that whoever enters this market first will have a greater chance of winning.
Not only that, because the central bank has clearly stated that in principle, no new institutions will be approved for a period of time in the future, many “outsiders” have turned to acquisitions and other means to enter the payment field.
In August this year, Evergrande Group completed the acquisition of Guangxi Jifutong at a high price of 570 million yuan, indirectly obtaining a third-party payment license. And this is just one example of the army of mergers and acquisitions. It is reported that the current market price of a “full license” with a nationwide business scope has increased from 200 million to 300 million yuan in 2015 to about 500 million yuan, almost doubling in just one year. Li Yaodong, research director of Zero One Finance, believes that the value of payment licenses may become higher and higher in the future, mainly because those who want to enter the market can no longer enter and can only enter the market by acquiring existing licenses.
