For the first time in history, the Chinese government and its central bank, the People’s Bank of China (PBoC), has opened its $27 trillion payment market to the world. Foreign firms are now allowed to apply for licenses to operate within China, competing against local service providers.
In China, homegrown companies have complete dominance over the internet and finance industries. Alibaba’s AliPay is said to have nearly 70 percent of the payment market share, while Tencent’s Tencent Pay is responsible for the remaining 30 percent. Ever since the launch of AliPay and the emergence of Tencent Pay, the two conglomerates have retained control over the local payment market.
However, overseas firms will soon be able to operate within China, serving users that are already accustomed to local payment applications. Hypothetically, US-based Square, a payment app developed by a team led by Twitter CEO Jack Dorsey, and KakaoPay, a South Korean payment app developed by KakaoTalk developers Kakao, could operate in China if they register with the PBoC and obtain licenses.