The Chinese Ministry of Commerce estimates that cross-border payments originating in China will top $1tn in 2016. The sheer size of the market will prompt payment gateways around the world to seek partnerships with Chinese counterparts.
In the last couple of years Chinese consumers’ online shopping needs have extended to foreign retailers, which has created significant demand for cross-border payments. According to the Chinese Ministry of Commerce, cross-border payments in China will top $1tn by the end of 2016 – with the annual growth rate expected to exceed 30%.
While companies like Alipay and other Chinese payment gateways will certainly benefit from this trend, there are great opportunities for those based in the most popular Chinese online shopping destinations, namely the US, South Korea, Japan, and Australia.
In 2015, Texas-based payment provider Mozido partnered with Chinese payment gateway PayEase to handle cross-border transactions for Nike, Korean Air, H&M, Dolce & Gabbana, and many more. Online retailers with demand from China will begin to expect their payment gateway service to accept purchases originating from China and, when volume reaches a feasible level, to accept payments in Chinese yuan.
Indeed, while the majority of global online retailers don’t accept payment in Chinese yuan at this point, the Ministry of Commerce’s forecast will persuade retailers with a large Chinese client base to start asking for this service. Mozido has shown the way forward, and payment gateways that service retailers with a sizable Chinese customer base will begin to reap the benefits.
By Arnie Cho, Senior Consumer Payments Analyst