Rise of e-payments will benefit economic rebalancing in China, says report

World
Europe

The rapid rise of third-party electronic payment in China is boosting the growth of China's online consumer market and will benefit economic rebalancing, according to a recent research report from Moody's.

The value of third-party e-payments in China has grown at an annual rate of more than 100 percent since 2015, providing consumers an alternative to banks' payment channels at lower transaction costs, said the global rating agency.

Icons for various payment services are displayed above the opening-hours sign inside a Sa Sa International Holdings Ltd. store in Hong Kong, China. VCG Photo

The rise of e-payments can stimulate online consumption and services, benefiting Internet companies and service companies along the supply chain, it said.

In the longer term, the development of e-payments and the overall growth of e-commerce will support China's economic rebalancing toward consumption from investment, according to Moody's.

The report also pointed out a cycle where the rise of e-payments will support growth of the service sector, which will boost employment and consumption, and in turn stimulate more e-payments.

Passenger buying train ticket by using e-payment, Hangzhou, China. /VCG Photo

Meanwhile, since the retail payment business and interchange fee income are only small parts of Chinese banks' revenue, the rise of e-payments will not affect the profitability and revenue growth of the banking sector too much.

However, negative influences could be imposed on some traditional retail channels that lag in e-payment systems and lose consumer traffic to online platforms, the report said.

Source: (Xinhua)