The global mobile payment market is now surging, and the capital of each channel is short-lived.
In the Chinese market, Alipay, WeChat, and UnionPay are staged the "Three Kingdoms War", and Apple Pay, Paypal, and Square in the US market are also being violently strangled.
Apple Pay takes the lead
The most familiar in the US market is Apple Pay, which has deep cooperation with UnionPay in China.
According to foreign media reports, Apple's mobile payment service Apple Pay has maintained a strong growth momentum since its release. In January of this year, Apple Pay added 27 US banks to support the service. Today, Apple Pay has more than 1,700 card issuers in the United States. Globally, in the fourth quarter of fiscal 2016 and the first quarter of fiscal 2017, the volume of transactions handled by Apple Pay increased by 500% year-on-year.
Apple CEO Tim Cook said recently that Apple Pay can be used in 4.5 million locations in the United States. Jennifer Bailey, vice president of Apple Pay, also said that 35% of retailers in the US now accept Apple Pay payment services, with more than 4 million outlets. And with retail giants such as Gap starting to accept Apple Pay, Apple expects this percentage to rise to 67% this year.
According to survey data provided by Boston retail partners in February this year, Apple's mobile payment service Apple Pay has surpassed the previous market leader PayPal, becoming the most popular mobile payment platform for US merchants.
Paypal strategic adjustment
Paypal experienced a period of nearly three years. During this period, PayPal's transaction volume and revenue both showed a trend of decreasing growth. The reason is that the market competition pressure brought by mobile payment is the main reason.
PayPal income is divided into two categories: transaction income and value-added service income, mainly based on transaction income, accounting for about 88%. Among them, the transaction income is based on the transaction fee (TPV, total payment volume), and the transaction fee is charged based on the transaction amount. Therefore, the higher the total payment, the higher the related income.
However, in the past four years, the average transaction rate of PayPal has been declining year by year, from 3.6% in 2012 to 2.9% in 2015.
Some analysts pointed out that, first of all, web payment is the highest market share of PayPal. Therefore, under the pressure of diversified online payment channels, PayPal's core business is challenged. Competitors in web payment include e-wallets from traditional credit card companies such as Visa and MasterCard, as well as e-commerce's own payment services such as Pay with Amazon and Alipay.
Second, as the popularity of smartphones increases, and the speed of mobile data networks increases, so does the demand for mobile in-app payments, and user loyalty is higher. According to media reports, e-commerce APP has reduced the demand for third-party payment services such as PayPal. For example, some of the top 10 e-retailers in the US do not support PayPal.
Finally, when shopping online at a store, users can use the mobile to include QR code payments, cloud-based wallet payments (such as Apple Pay, Android Pay), and Bluetooth payments. NFC has an advantage in offline retail payments and is popular with users. PayPal is at a disadvantage in this technology.
In response, PayPal seeks to “strongly combine†actions frequently. In 2016, Paypal and Visa reached a cooperation on NFC payment, users will be able to trade through Visa's Token, which will promote the use of PayPal e-wallet in physical stores and expand the offline layout.
In April of this year, Android Pay and PayPal will cooperate, and PayPal will become a mobile payment platform available to Android Pay users. It is reported that PayPal has pushed updates to its Android client. After the upgrade, Android Pay users with NFC communication module can use PayPal account for online store consumption, in addition to using MasterCard and Visa cards for payment.
Therefore, Paypal's first quarter earnings report exceeded market expectations. During the reporting period, Paypal's net profit was $384 million and revenue was $2.98 billion. During the quarter, total payments on the PayPal platform increased 23% year-on-year to $99.3 billion, the first time approaching $100 billion, helping to achieve 17% year-on-year revenue growth.
According to the report, PayPal added 6 million active user accounts in the first quarter. As of the end of the first quarter, the total number of active user accounts reached 203 million, including 16 million merchant accounts. During the reporting period, the transaction volume handled by PayPal reached 1.7 billion times, a year-on-year increase of 23%. In the past 12 months, PayPal's transaction volume per active account was 32, a year-on-year increase of 12%.
Square is a sudden rise
Silicon Valley Black Technology - Square, originated from company founder Jim McKelvey hit the "no cash transaction" puzzle.
McKelvey was a small business at the time, but because the customer brought a credit card but no cash, he could not complete a large transaction. Then, in the context of the emergence of the iPhone, he and the founder invented a credit card reader that can connect to the iPhone.
By downloading the app, the small micro-business will receive a free card reader after registration, and you can swipe the card. Therefore, the traditional acquirer may underestimate the needs of small and micro-businesses, thus giving Square a chance.
Square is an acquirer, but the method of acquiring users is different from traditional acquirer. As long as a merchant has a smartphone, they can complete credit card transactions anytime, anywhere. Therefore, the traditional acquirer may underestimate the needs of small and micro-businesses, thus giving Square a chance.
After that, Square gradually developed into an acquiring payment company that has both hardware (a card reader for smartphones and iPads) and software (a POS terminal for smartphones, a payment system, and background analysis software). In this main business, there are three major businesses of Capital (business lending), Caviar (food and beverage delivery) and Cash (personal to personal payment).
In early May, Square announced that its first quarter 2017 financial report showed that its total revenue reached US$462 million, maintaining a growth rate of 22% per year. In accordance with US GAAP, Square's first quarter net loss was $15.09 million, compared with a net loss of $96.76 million in the same period last year. In addition, Square's total payment is still growing, reaching $13.6 billion, an increase of 13% year-on-year.
In 2016, Square's total payment amounted to 50 billion US dollars, an increase of 39%. Among them, corporate transactions increased by 35% from the previous year, and increased to $402 million. Hardware such as the Square Stand cash register and the iconic reader created $9 million in revenue, a 39% increase from the same period in 2015.
In addition, it is worth noting that while payments are becoming more virtual and digital, Square is doing the opposite, launching its own physical payment card this month. Square then confirmed to the media that the payment card was not connected to the user's bank account and only provided convenience for the user to pay only for the physical card. Although users can still make payments through standard bank accounts, the advantage of Square debit cards is that there is no one-day delay in bank transaction information.
UnionPay fights back
Although the US Internet payment, mobile payment, etc. started earlier, China has taken advantage of its latecomer to achieve a corner overtaking.
In April of this year, the US consumer finance website LendEdu surveyed about 2,000 millennials (born between 1981 and 1998) that only about 14% of people used mobile payment software frequently, while 35% said Never used mobile payments.
According to a report on China by iResearch, China Mobile's payment transaction volume exceeded RMB 38 trillion (US$5.5 trillion) in 2016, which is three times that of 2015 and the scale of third-party mobile payment services. It has more than doubled and rose to $5.5 trillion. According to data from market research firm Forrester Research, last year US mobile payment transactions were only $112 billion, and China’s mobile payments were nearly 50 times larger than in the US.
It can be seen that China's mobile payment market is not only growing at a high speed, but also has a much higher market capacity than the United States.
Looking at the domestic situation, Analysys' report "China's third-party payment mobile payment market quarterly monitoring report for the first quarter of 2017" shows that Alipay and Tencent Finance, represented by WeChat payment, have 53.7% and 39.51% of the mobile payment market in the first quarter of this year. Share.
The market share has gradually been opened, and China UnionPay is hard to hide anxiety. As we all know, the "Bar Code Payment Service Specification" (Draft for Comment) was officially issued in August 2016, and only four months later, UnionPay released the "UnionPay QR Code Payment Standard", and the UnionPay Cloud Flash II was born in this context. Dimensional products have inherent advantages in terms of safety and industry acceptance.
On May 27th, UnionPay released the cloud flash payment QR code product. With a strong merchant network and acceptance network, on the day of the conference, nearly 600,000 merchants across the country have already supported cloud flash payment for QR code payment. The 2.5 million POS terminal can fully support UnionPay QR code payment without any modification. UnionPay has more than 30% of its more than 8 million POS terminals.
At present, the first batch of commercial banks supporting cloud flash payment QR codes has more than 40 commercial banks including industry, agriculture, China, construction, exchange, and China Merchants Bank (600036, stock bar), UnionPay and industry, agriculture, and China. The docking of the four banks' no-card fast payment channels has been completed. At the same time, nearly 60 commercial banks will be opened during the year, and will be fully integrated with other major national commercial banks and regional banks without card fast payment channels.
It is reported that UnionPay has covered smartphones including Apple Pay, Samsung Pay, Huawei Pay, Mi Pay, HCE Cloud Payment, QR code payment, wearable products, UnionPay IC card, and can be said to be “Cloud Flash Pay†family. The full payment system has taken shape.
In addition, UnionPay has already laid the groundwork for entering the overseas market.
Earlier than this conference, UnionPay International and international card brands Visa and MasterCard jointly announced in Bangkok on May 9 that the three parties will cooperate in launching the Thai universal QR code payment standard in the third quarter of this year. The standard will serve as a two-dimensional code standard recommended by the Central Bank of Thailand to local commercial banks, financial institutions and merchants, which will help to rapidly increase the level of electronic payment in Thailand.
Not only in Thailand, UnionPay has achieved impressive results in more than 50 countries and regions along the “Belt and Roadâ€.
Uzbekistan, the first country to adopt the China UnionPay system;
In Kazakhstan, the coverage rate of UnionPay cards for local ATMs and POS terminals will be increased to 80% within two years;
In Pakistan, UnionPay has become the second international card brand in the country's card issuance market;
Laos, UnionPay International participated in the establishment of the national bank card payment system in 2015;
Seven major transit networks in Singapore, South Korea, Malaysia, Indonesia, and the Philippines have been authorized to use the UnionPay chip card standard as the technical standard for acceptance and card issuance.
Fan Yifei, deputy governor of the central bank, commented on the same day: "The global use of UnionPay cloud flash payment QR code products will further promote China's payment service and payment standards 'going out'." The establishment of the UnionPay full payment system will also accelerate the payment industry. Reshuffle and become the leader of domestic payment standards.
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