Third Party Payments Licenses See Prices Drop 50% in Six Months

The going price for  third party payment licenses in China have halved in the space of a year as regulators step up their pressure on the sector.

“Third party payment licenses are definitely cooling down,” said one industry insider to Securities Daily.

“In the past the transaction price for a flu license was 800 million to 1 billion yuan, but now full licenses can be purchased for 300 – 400 million yuan. In spite of this it’s also a case of there being prices but no market.”

“Price for payment licenses are definitely return to normal – this is the overall trend in the market,” said Li Chenpeng (李辰鹏) from CPCN (中金支付).

“The prices for full third party payments licenses which had previously been driven up to 3 billion yuan have since seen a sharp decline, even dropping by half,” said another industry insider to www.stcn.com.

Domestic media reports from the start of the year previously indicated that the price for full third party payments licenses had reached a maximum of 3 billion yuan, while industry insiders considered a price of 1.2 billion yuan to be reasonable.

China’s third party mobile payments market saw transactions hit 40.36 trillion yuan in the first quarter of 2018.

During the period from 2011 to 2015 the Chinese central bank issued 271 third party payments licenses, yet suspended issuance in 2016 as well as approvals for the establishment of new payments companies in order to “control the overall volume, optimise structure, raise quality and [ensure] orderly growth.”

According to data from the People’s Bank of China there are currently a total of 238 companies in China that hold third party payments licenses, which means that the number of licenses that has been revoked has hit 33.

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