How cross border payment companies can enter China

How Chinese pay by scanning QR code
  1. China is a very tough market to enter for cross border payments companies, but for those who can crack the puzzle, it can also be very lucrative
  2. Before jumping in, one should have a clear view of: 1. market competition, 2. customer segment, 3. value proposition, 4. distribution, 5. and regulation

Intro

Why China

My framework

  • market competition
  • customer segments
  • value proposition
  • distribution
  • regulation
My initial analysis framework

Market competition

Customer segments

Value proposition

Distribution

Regulation

Why so challenging?

Chinese customers have a number of payment options

Market Entry Template

  1. The inbound market is much larger. For remittance it was ~$60 billion inbound vs $15 billion outbound based on 2019 data.
  2. Foreign companies are more likely to leverage their existing resources from their current operation. My assumption is that these companies are well established in their home country or countries.
  3. I view inbound as a bridge to establish the brand with people of the country (China in this case) and establish local partnership without spending the cost and efforts of a full physical operation in China.
  4. The success of inbound can then help pave the way to set up outbound, which is a lot more complicated in regulation, operation, marketing, and partnership.

Inbound

Outbound

Conclusion

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passion for #fintech #payments #RTP real time payment #Banking as a Service #digital strategy #blockchain

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Ming-Chieh Lee

Ming-Chieh Lee

passion for #fintech #payments #RTP real time payment #Banking as a Service #digital strategy #blockchain

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