Banks Admit They Cannot Keep Up With FinTech Companies

Banks Admit They Cannot Keep Up With FinTech Companies

Major global banking institutions have recently admitted they are lagging behind Chinese FinTech firms due to the growing popularity of mobile payment

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Major global banking institutions have recently admitted they are lagging behind Chinese FinTech firms due to the growing popularity of mobile payment options. Jing Ulrich, a vice president of JPMorgan Chase’s Asia Pacific, lauded platforms such as Alibaba Group’s AliPay and TenCent’s TenPay, which are the most dominant players in this sector. During the ‘Rise Conference’ held in Hong Kong, she provided some illumining statistics on this given issue.

According to her, JPMorgan processes 94 million payments via the QuickPay platform on an annual basis. Yet TenCent, during the Chinese New Year festivities (a 5-day affair) processed 46 billion payments! Essentially, this averages at 800 million payments on the hour. Ulrich also noted that VISA’s current payment processing capability stands at 25,000 for every second. However, the AliPay platform can effortlessly handle 50,000 payments during the same duration. AliPay has grown to be the most rampantly utilized FinTech platform in China.

As of date, it boasts of 900 million user accounts, including 350 million active ones. Its market cap value stood at approximately $60 billion in the month of January. This definitely signifies it’s well poised to dominate the country’s FinTech sector. An factor that is all the more certain when you reflect on the numbers of conventional bank clients it continues to lure with its revolutionary services.

TenCent, the brains behind WeChat, a popular Chinese messaging app, handles 800 million users on a daily basis. It as well owns a number of subsidiaries in the online and mobile devices value-added services sphere. Quite recently, it was said it had serious plans to launch its own blockchain platform.

GoldSachs has also noted the meteoric rise of Chinese FinTech firms in online payment services.

In a 2010 – 2016 report it released, 3rd party payments rose 74 times from $155 billion to an amazing $11.4 trillion. This trend appears to continue skyrocketing as more and more individuals resort to alternative payment options. In Q117, non bank services rose by 60% to $3.9 trillion with 47 billion transactions registered during this timeframe. This is according to reports released by the Chinese Central Bank. To this end, it has now reportedly founded its own FinTech committee whose objective is to reinforce, study, plan and integrate financial technologies.

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