Posts tagged ‘Mobile payment’

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18/02/2016

Apple Pay takes on China’s internet kings in mobile payments | Reuters

Apple Inc launched its mobile payment system in China on Thursday in a bid to convince the hundreds of millions of users of the country’s entrenched, dominant services to switch.

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“We think China could be our largest Apple Pay market,” Jennifer Bailey, vice president of Apple Pay, told Reuters in an interview in Beijing.

In an early boost, China’s biggest lender, Industrial and Commercial Bank of China Ltd (ICBC), was among the banks that said earlier this week that customers would be able to use Apple Pay from Thursday.

However, Apple Pay has not had an easy ride so far in China, the fifth country to get the service. Even in its U.S. home market, Apple has faced skeptical retailers in its effort to develop a new revenue stream.

China is not likely to prove any easier to crack.

“People switch applications for significantly better experiences, it (Apple) has to deliver not just a little bit more secure, or a little bit easier to use,” said Mark Natkin, founder of Marbridge Consulting.

Greater China is Apple’s second-largest market by revenue, and the world’s biggest smartphone market. By the end of 2015, 358 million people, more than the U.S. population, had already taken to buying goods and services by mobile phone, according to the China Internet Network Information Center.

The vast majority are using payment services from China’s two biggest Internet companies that have existed for years.

Social networking and gaming firm Tencent Holdings Ltd operates WeChat Payment, and e-commerce company Alibaba Group Holding Ltd, through its Internet finance affiliate Ant Financial Services Group, runs Alipay.

“With 100 percent saturation of local payment systems, no one in China is clamoring for Apple Pay,” said one retailer who declined to be named for fear of harming business prospects. “Today, everyone has a local payment option on their phone, so Apple Pay is a solution in need of a problem.”

Source: Apple Pay takes on China’s internet kings in mobile payments | Reuters

Posted in China alert, Economics, electronic payment, Technology | 1 Comment »

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19/12/2014

Chinese Banks Lure Deposits by Offering Goodies for Cash – Businessweek

Banks in the U.S. once gave away toasters and irons to lure depositors. Banks in China are upping the ante. With customers pulling out money and putting it into higher-yielding investments, they are offering Mercedes, iPhones, and daily deliveries of vegetables to sidestep interest rate caps and get people to stash some yuan in savings accounts.

Chinese Banks Offer Goodies for Cash

“Chinese banks are hemorrhaging their deposits,” says Rainy Yuan, an analyst at brokerage Masterlink Securities in Shanghai. China’s banks lost 950 billion yuan ($154 billion) of deposits in the three months through September, the first quarterly drop since 1999. In the first 11 months of the year, new deposits were 23 percent lower than in the same period last year, People’s Bank of China data show. Offering incentives to attract money is not the solution, Yuan says: “There is no fix for this. All the efforts they made to win savers back will only push up the costs, so it’s a losing battle to fight.”

Decline in new deposits in the first 11 months of 2014 vs. the same period last year

Savers seeking higher returns have been pouring money into online money-market funds offered by the e-commerce companies Alibaba Group (BABA) and Baidu (BIDU). One fund, Yu’E Bao, started last year by Alibaba affiliate Alipay, drew 535 billion yuan in its first 15 months of existence from 149 million customers, more than the populations of France and the U.K. combined. Users simply tapped a few buttons on their mobile phones to secure an annual rate of return that climbed as high as 6.8 percent before falling to about 4 percent recently.

Savers can also earn more on their money by moving to high-yield products, the fastest-growing part of the so-called shadow banking system. Households put 12.9 trillion yuan into high-yield trust products as of Sept. 30. Trust companies pool investor capital to put money in real estate and construction projects, or make corporate loans, and promise returns of more than 10 percent. Trust companies have seen assets under management rise more than tenfold since the start of 2009.

The Shanghai Composite Index’s 45 percent surge over the past six months has led people to shift money from banks to stocks. In the first week of December, Chinese investors opened almost 600,000 stock trading accounts, a 62 percent increase over the previous week, according to China Securities Depository & Clearing.

To stimulate the economy, China’s central bank on Nov. 21 announced a cut in benchmark interest rates for the first time in more than two years. That was offset by the central bank’s decision to raise the maximum interest rate banks can pay customers to 20 percent over the benchmark from 10 percent above it. Ping An Bank (000001:CH), China Citic Bank (601998:CH), and Bank of Ningbo (002142:CH) immediately alerted customers through text messages that they would offer the highest rate allowed.

via Chinese Banks Lure Deposits by Offering Goodies for Cash – Businessweek.

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