China online and offline payment strategy

Offline bank transfer is still the primary payment option in China. But people gradually get used to online payment, mobile payment and telephone payment.

For online payment, we will mainly discuss E-banking, online third party payment and online credit card payment. For offline payment, other than offline bank transfer, we will look at mobile payment and telephone payment.

For small amount payment, people tend to use convenient payment options such as online payment and mobile payment(Especially young well-educated people in urban area). We think this is an obvious trend in the future.

This report try to list the complete online and offline payment solutions in China with a brief introduction of each payment approaches, aiming to have a general view of China payment market. We will discuss the feature, usage and trend of top 5 payment options in TOP 5 payment approaches report.

Online payment

  1. 1. Online Third party payment

Online third party payment in China is more popular than e-banking of major bank. The reasons are: a) Online third party payment can integrate the payment between different bank, using third party payment service like Alipay, users can avoid the inter-bank transfer fee and the payment will be completed in a matter of seconds rather than days. b) People think pay from third-party payment platform rather than their bank account is much safer. C) Like the survey conducted by Paypal, it is easier for people to pay “money” on their “Paypal account” rather than from their own pocket.

Below are the major online third party payment service providers:


Introduction Co.,Ltd (AliPay) is China’s leading online payment service by both number of users and total transaction volume. A member of the Alibaba Group, it enables individuals and businesses to securely, easily and quickly send and receive payments online. AliPay works like an escrow service, solving the issue of settlement risk in China.

Since its launch in 2004, AliPay has become the most popular and extensively used online payment tool for all areas of e-commerce in China, and is fast becoming the industry standard. As of 10 May 2009, AliPay had more than 180 million users and a daily transaction volume exceeding RMB700 million, through more than 4,000,000 daily transactions.

Comment: Alipay is the most popular online payment and third party payment method in China. The biggest reason is that the company that develop Alipay also own the biggest C2C website( , B2B website(, online advertise trade platform( in China. More than 100 million active users of those website will use Alipay as defaulted payment solution. Alibaba account for more than 50% market share of China third party payment market(both online and offline).[1]


More than 200,000 shopping website accept Tenpay. Tenpay is compatible with the e-banking service of major domestic bank. Users can use Tenpay to send payment, receive payment and withdraw money to bank account. Users can also use Tenpay to charge mobile, deposit money to game account, buy air ticket, which help to make life and payment easier. Tenpay also provide excellent payment platform to corporate users, covering B2B, B2C and C2C areas.

Comment: QQ, developed and owned by Tencent, is the most popular instant messenger in China, with more than 300 million active users. Based on QQ, Tencent has developed 3D show, QQ game, QQ pet which all have become unbelievable popular among QQ users, QQ users use Tenpay to buy virtual currency. No online seller in China can ignore the 300 million user base of Tencent and their payment habit.

Tenpay occupy about 20% market share of China third party payment market.


Chinapay is a subsidiary company of China UnionPay(银联),Almost everyone in China has more than one China UnionPay(CPU) bank card. So that is a huge previledge. Chinapay rank No.3 as China third party payment servicer provider.


99Bill Corporation is an Internet company focusing on providing online payment platform services to facilitate online transactions in China. The Company is the first company in China offering email and mobile phone number based online payment platform and solutions. Our investors include seasoned China Internet industry entrepreneurs and international venture capitalists.

The Company’s founding members are seasoned entrepreneurs in China’s Internet industry and have extensive experience in product development, technology innovation, market expansion, corporate management and capital financing.

Under the “99Bill” brand, the Company’s products and services aspire to support a safe and convenient transaction environment and establish secure, fast and confidential payment platform for e-commerce operators, Internet content providers and individual users. With an email address and/or a mobile phone number in China, our registered users can send and receive money easily, promptly and securely. “99Bill” is the number one choice for making money and sending payment online.

Comment: As an established online payment service provider, 99bill’s selling point is that it realize the limit of credit card payment in China. They found alternative payment solution for people who don’t have credit card, such as prepaid charge card.


China Mobile and China UnionPay are the co-founders of Soopay. China mobile is the leading mobile carrier in China with more than 350 million users. China UnionPay cards could currently be accepted by 1,180,000 merchants, and used on 1,850,000 POS terminals. So Soopay should have a bright future. By at the moment, it is not on a par with Alipay, Tenpay, and Chinapay..

Yeepay (易宝)

YeePay was founded in 2003 and has offices in Beijing,China and Silicon Valley. YeePay has rapidly expanded its services to a growing number of merchants and consumers.


Baifubao is developed by the biggest Chinese search engine, Baidu has a large database of company and individual users, Baifubao has the potential to become leading third-party payment service provider in China.


Paypal(China localized version) is binding with Ebay China. When Ebay China lost the competition to Paypal lose the competition in third-party payment market because of small user base.


iPS (HK) Limited is the subsidiary of Universal Technologies Holdings Limited (SEHK Stock Code: 8091) with its headquarters in Hong Kong, a leading online payment solutions provider for both enterprise and individual customers in e-commerce by providing convenient and secure payment collection services for mass online merchants. With more than 8 years’ of online payment experience, iPS is extending its business to offline payment field as well. iPS payment platform ranks No.1 in terms of debit cards (Yuan/RMB) acceptance within China and will carve special payment and settlement solutions upon merchants’ demands.


PayEase currently focuses on Payment Service Platform that covers mobile, online, call center (CRM), retail / POS and data mining of customers’ profile.

The comprehensive payment platform is connected to over 92% of the most banks in China, supports over 64 domestic credit cards and debit cards including 4 worldwide accepted international credit cards: MasterCard, VISA, American Express and JCB cards. PayEase’s major customers cover Media, Travel, TV Shopping, Internet Shopping, Insurance, Mobile Carrier Industries and Online Game Operators throughout the country.

  1. 2. E-bankingOnline transfer

According to a report by DCCI((Data Center of The China Internet)[2], The individual users of e-banking has reached 86 million in 2008, it is expected to exceed 100 million in 2010. Chinese people are getting used to making payment online with their e-bank account. The online banking service of Industrial and Commercial Bank of China, China Merchants Bank and China Construction Bank rank Top 3 in China online banking service market.

Online bank transfer is very convenient, but there are some concerns:

a)      Security issue. Users will only use their online bank account to transfer small amount of money. Users are worried that their online bank account will be hacked. And it does happen very often.

b)      Interbank transfer. Most users will only transfer payment to the same bank account, inter-bank transfer is very expensive and will take 3 to 5 days for the payment to going through.

  1. 3. Credit card

China has issued more than 150 million credit cards[3], using credit card to make payment has become a trend. In e-commerce, users can use credit card to make payment online and by telephone, which is very convenient. The security issue of make payment online by credit card is becoming the biggest hindrance of online credit card payment.

The credit card of Bank of China, The Agricultural Bank of China, China Minsheng Bank and SPD bank don’t support online payment. Credit cards from other banks all support online transfer. But there is strict single transaction limit, daily limit and monthly limit.

Offline payment

  1. 1. mobile payment

Chinese mobile users has reached 641 million in 2008, it is expected to reach 1 billion in 2013.[4] Mobile users are used to making small amount of payment on their mobile phone. Generally there are 2 popular ways to make payment on mobile: Sending text message and using mobile prepaid charge card.

According to a report “ Chinese third-party payment market analysis” by Analysys[5], the mobile payment account for 2.7% market share of Chinese third party payment market, compared with 97% market share of online third party payment(such as Alipay, Tenpay) and 0.5% market share of telephone payment.

2Telephone payment

Telephone payment is not very popular, and it only has a very tiny market share[6]. But it is an offline payment option.

3.  Bank transfer

Online payment and mobile payment are not on a par with offline bank transfer. For big amount payment, people will use offline bank transfer only. For small amount payment, young and well-educated people like to explore new payment option, such as online payment, mobile payment. But considering that more than 90% individuals in China don’t have personal computer and most people are not well-educated. So bank transfer is still the primary payment option for most people.

Inter-bank transfer is expensive and slow in China. So vendors will open business account in the major banks to make sure the buyers don’t have to do inter-bank transfer. Bank transfer fee vary from bank to bank. For example, Industrial and commercial bank of China charge 1% for transfer amount less than 5000RMB, while Agricultural bank of China charge 0.5% for the same amount.

Below is the major banks in China:

Bank of China

Industrial and commercial bank of China

Agricultural bank of China

China construction bank

China merchants bank

Bank of communications

China Post

China industrial Bank

Shenzhen development bank

Guangdong development bank

China Minsheng Bank

Huaxia Bank

Shanghai Pudong development bank

China everbright bank

[1] According to Chinese third party payment market analysis by Analysys,

[2] (Data Center of The China Internet)

[3] According to the report at

[4] According to the report at


[6] According to the report at, it only account for 0.5% market share.

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3 Responses to “China online and offline payment strategy”
  1. Definitely have to thank Dan Harris of for posting this ( and can always count on Dan to supply fresh material that’s not only entertaining but, moreover, relevant. Keep up the sensational efforts. You taught me so much here.

    –ADM from Prague, Czech Republic


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