The payment industry has reached a turning point, with leading payment companies benefiting from license consolidation to gain market share, while cross-border business and payment-plus services see rapid expansion, according to a research note from Guotai Haitong.
For domestic acquiring, the firm favors institutions with clear compliance advantages, first-to-recover bank card transaction volumes, and continuously rising market share. In cross-border operations, it prefers companies with comprehensive license portfolios, strong local presence abroad, and deep integration into international e-commerce and card network ecosystems. For payment-plus, Guotai Haitong is more optimistic about firms that have already launched AI products, can upgrade payment channels to "payment plus SaaS" business services, and have taken a forward-looking position in Agent payment infrastructure.
The payment industry turnaround is timely, with traditional acquiring benefiting from consumption stimulus and license contraction
Acquiring revenue is driven by both transaction volume and fee rates, and both ends are showing inflection points. On the fee side, the central bank continues to cancel payment licenses and has stopped issuing new ones, accelerating the exit of non-compliant small and medium-sized institutions. This is expected to improve the market share of leading firms. At the same time, vicious price competition is being curbed, strengthening the bargaining power of major players. Industry fee rates are likely to stabilize or even rise marginally, supporting profit recovery. On the transaction volume side, stimulus policies such as consumer loan interest subsidies are intensifying. Bank card consumption in the first quarter recorded its first positive growth after seven consecutive quarters of decline, signaling a stabilization and recovery in bank card acquiring, while QR code payment volume grows rapidly.
Rising cross-border spending and digital yuan expansion drive payment firms to scale international operations
The cross-border payment market has vast potential, with growth momentum steadily releasing. E-commerce exports, inbound tourism, and cross-border personnel flows collectively expand the market. Digital yuan opens additional incremental space: its peer-to-peer real-time settlement feature can address the inefficiency and high costs of traditional cross-border payments, reducing the cost for payment firms to access cross-border clearing channels and supporting innovative services like cross-border acquiring. Furthermore, the profitability and competitive landscape of cross-border business are significantly better than the domestic market. Average fee rates are higher than in the domestic payment space, and high barriers in licensing, clearing, and compliance limit participation, creating a blue ocean. Leading firms have already shown results from their overseas expansion, with cross-border transaction volumes growing rapidly. Companies with strong license matrices and deep ties to e-commerce and card network ecosystems are well-positioned to capture incremental market share, making cross-border payment a second growth curve.
AI empowers the entire payment chain, with differentiated competition and SaaS revenue reshaping business models
AI Agents are becoming a new transaction gateway. According to Research Intelo, the global intelligent payment market is projected to grow at a CAGR of 24% from 2026 to 2034. Payment companies' AI deployments now cover the full chain—terminals, operations, and risk control—with three key value realization pathways. First, AI products create a service experience gap, boosting market share. Second, AI-powered operational tools, embedded into merchant business processes, convert into subscription-based SaaS revenue with gross margins significantly higher than the core payment business, becoming a second growth engine. Third, the Agent economy generates ultra-small, high-frequency machine-to-machine payment needs, and the aggregation of micro-payments opens up a completely new business model blue ocean.
The payment industry is cyclical, with valuation influenced by expectations of fundamentals. The current inflection point in fundamentals is already emerging
Historically, both policy-driven and event-driven catalysts have influenced valuations by altering market expectations about fundamentals. Currently, the payment industry is showing marginal improvement driven by policy, with cross-border payments and AI-plus becoming new event catalysts, making the sector's configuration cost-effectiveness increasingly prominent.
Risk warnings: Consumption recovery may fall short of expectations; industry competition could intensify; AI technology deployment may lag behind expectations.
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