China and India - The Next Big Global Payment Opportunities

| Monday, January 8th, 2018

As the money transfer space becomes increasingly crowded in the US, UK, and Europe, many companies look east for more room to grow.  China and India both contain enormous e-commerce and remittance markets that are rife with opportunity; however, these markets also pose unique challenges to entry.  We’ve identified some important trends that highlight the potential benefits and pitfalls of doing business in these industry hotspots.

Growing E-Commerce Markets


With $750 billion USD in online marketplace sales last year, China boasts the largest e-commerce market in the world.  Goldman Sachs Research expects this number to double by the year 2020 because of wide-scale improvements in inventory and fulfillment infrastructure, as well as increases in the number of China’s online shoppers.


While not yet in the big leauges with China or the US, India houses the fastest growing online retail market.  The country’s population of internet users hovers around 450 million.  Analysts predict that e-commerce sales in India will reach $64 billion USD by 2021, which represents a five-year compound annual growth rate (CAGR) of over 30 percent.  This prediction takes into account anticipated constraints on growth, such as government controls, the reduced availability of venture capital, logistics difficulties, and slow upticks in the number of online shoppers. 

Loosening of Money Transfer Controls


In reaction to the slowing of the Chinese economy and the downward movement of the renminbi last year, Chinese regulators tightened controls on capital flowing outside of the country, as well as on foreign currency exchange.  For example, citizens exchanging renminbi for other currencies faced stricter ID checks from banks.  While the new measures aimed to tip the scales toward inbound investments, they instead led to the opposite effect as foreign investors got spooked by the additional red tape.  China is now loosening its grip on the less productive controls, and the renminbi has recently recovered.


The Reserve Bank of India (RBI) is undertaking a big push to encourage digitization of retail payments, and it is planning to release new guidelines on mobile wallets by the end of the 2017-18 fiscal year.  These guidelines will let mobile wallet providers conduct cross-border inbound remittances, as long as they’re KYC (know your customer) compliant.  In addition, the maximum amount of money in each wallet can never exceed 50,000 rupees. 

Any business that wants to operate a digital wallet service in India requires a Prepaid Payment Instrument license (PPI is the technical acronym for digital wallet).  According to the RBI’s latest annual report, the number of non-bank entities that obtained such a license increased to 55 during the prior fiscal year.  In light of these recent efforts, the RBI expressed confidence about achieving its goal of 25 billion digital transactions by next June.

There are signs that India’s outbound remittance market is picking up speed as well, such as the increase in money transfer capabilities between India and Nepal.  Back in 2009, the RBI had launched the Indo-Nepal Remittance Scheme, which allows Nepali migrants to send up to 50,000 rupees at a time to relatives and friends back home.  Some service providers are just now taking advantage of this legislation.  Eko, an Indian payment company and itzcash, an Indian mobile wallet, recently expanded remittance service to Nepal in partnership with Prabhu Money Group, a top remittance company that is registered in Nepal.

East-West Partnerships Between Big Industry Players

Recognizing the vast potential of the Chinese and Indian markets, big players in the global payments industry have developed relationships with their eastern counterparts.

international handshake.jpg


Ant Financial, which is Alibaba’s fintech affiliate and the owner of Alipay, has agreed to purchase MoneyGram, the world’s second-largest remittance company (after Western Union), for $1.2 billion.  With over 300 million users and an extensive network of cash pickup locations, Alipay handles half of China’s online payments.

The proposed deal enables MoneyGram to continue operating independently out of its Dallas headquarters while enjoying the new benefit of direct access to 450 million Alipay users.  But MoneyGram can’t celebrate just yet.  Some US lawmakers have expressed concerns about the sharing of American citizens’ financial data with China and the consequent risk to national security.  The deal is currently under review by the Committee on Foreign Investment in the United States (CFIUS), but MoneyGram expects it to close by the end of 2017.

Ripple wishes it were so lucky as to get Alibaba on board.  The San Francisco-based blockchain startup intends to establish operations in China, anticipating a high demand there for faster and cheaper payment solutions.  Several prominent banks around the world have joined Ripple’s payment network, and the company now seeks a Chinese partner.

Companies like MoneyGram and Ripple realize that it’s much easier to break into a foreign market with the support of local partners who can help overcome challenges like language barriers, lack of brand recognition, and government regulations.  Apple made the mistake of trying to go it alone in China, and it’s losing market share.  ApplePay currently claims less than 1 percent of China’s $8.8 trillion USD mobile payments market versus 38 percent and 50 percent for WeChat Pay (a popular Chinese payment platform) and Alipay, respectively.

If you’re looking for a partner in China, first familiarize yourself with the key Chinese payment providers and where they’re located:




While Beijing and Shanghai have attracted the majority of money transfer companies, some of the most impactful companies are headquartered in lesser known cities.  Hangzhou-based LianLian Pay, one of the largest mobile money transfer providers in China, has already partnered with industry leaders like PayPal and World First.  And Western Union teamed up with WeChat Pay starting in 2015. 


If and when it closes the deal with Ant Financial, MoneyGram will receive a windfall in India too.  In total, Ant Financial and Alibaba own 40 percent of India’s largest mobile payment business, Paytm (“Pay Through Mobile”), as well as over one-third of Paytm E-Commerce.  This means that MoneyGram can to tap into the 180 million registered Paytm users in India.

London-based WorldRemit launched a partnership this summer with Yes Bank, India’s 5th largest private sector bank.  As a result, WorldRemit customers from 50 countries around the world can now send money to India through their mobile phones.

Amazon and PayPal seek a firm foothold in India as well.  The former has been duking it out with Alibaba for control of India’s online retailing since 2014.  Despite investing billions of dollars into its India-based operations, Amazon still comes up short.

PayPal chose Chennai and Bangalore as the newest homes for its innovation labs, recognizing that India is a rich breeding ground for innovation and entrepreneurship.  The company is reportedly seeking a PPI license from the RBI in an attempt to catch up with key e-commerce players in India who already have one, including Paytm, Amazon, FreeCharge, and Flipkart. (License applications are temporarily suspended until the new mobile wallet guidelines take hold, but PayPal might have applied prior to the suspension.)  PayPal explored an acquisition of FreeCharge last year without fruition (Axis Bank, India’s third largest private sector bank, prevailed instead), and there are signs that it might invest in Flipkart’s payment app, PhonePe.  One way or another, it appears the PayPal is determined to enter India’s digital wallet race.

During this intense battle for virtual territory in India, the brick and mortar payments industry is still thriving.  Here are the international money transfer providers with the largest physical presence in India:



Non-bank providers like the clear frontrunner, Western Union, are well-rooted in India, so coaxing customers away from these incumbents onto online platforms poses a tough challenge.

Advancements in Money Transfer Industry Intelligence

All of the interest in China and India from global payment giants is a good sign that they’re the places to be.  But it also means that the longer newer players wait to establish themselves, the harder it will be to gain ground.  Fortunately, services like FXCintel help postion money transfer providers for success with the latest industry analytics and insights.

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