Opportunities and Challenges Presented by Foreign Investment to Domestic Payment Industry
Nowadays payment service is increasingly interweaving into commerce and the Internet in China. Its role as the last-mile infrastructure provider connecting the two arenas for many business models is increasingly being appreciated by the market. Not long ago, China’s payment sector was, by and large, not accessible to foreign players, although many foreign players wish to enter into the rapidly growing Chinese payment market and many domestic payment service providers wish to have certain foreign participation as a way to gain access to the offshore capital market. This situation may soon be changed with the promulgation of The Announcement Regarding Certain Issues on Foreign Investment in Payment Institutions (the “The Announcement”) by the People’s Bank of China in March 2018. This article will discuss the regulatory barriers for foreign accession to the Chinese payment market prior to the Announcement, key provisions of The Announcement, and the implications for foreign investment in payment industry in China.