From 'Quick Money' to 'Slow Infrastructure': Why Is the Endgame of Payment Globalization a Marathon?
Chinese payment industry is undergoing a major reshuffle, with domestic competition intensifying and regulatory pressures increasing. As profit margins shrink, major players are expanding overseas where cross-border payment fees are 3-5 times higher. However, entering foreign markets requires significant investment in licenses, compliance, and talent. Acquiring payment licenses, such as the U.S. MTL, involves high costs and long waiting periods. Companies like Airwallex and LianLian Global have benefited from early investments in global licenses, achieving rapid growth after years of preparation. Compliance with regulations like AML, KYC, GDPR, and DORA adds substantial hidden costs, while a shortage of skilled compliance professionals further increases expenses. Geopolitical risks, as seen in Paytm’s downfall in India and TikTok’s challenges in the U.S., highlight the unpredictability of overseas expansion. Chinese companies are adopting a "China +1" strategy, turning to regions like the Middle East and Indonesia to mitigate risks. The global payment landscape is fragmenting, and success now depends on long-term investment in compliance and infrastructure rather than quick gains. The era of fast growth is over; payment globalization has become a marathon, not a sprint.
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