Cross-border payments have emerged as a new battleground. As Q3 2025 financial reports flood in, the divergence among payment institutions has intensified. While growth in traditional merchant acquiring and lifestyle services slows, "cross-border payments" remain a high-growth segment for many firms. Listed companies such as Lakala Payment Co.,Ltd. (300773.SZ), Xgd Inc. (300130.SZ), and Newland Digital Technology Co.,Ltd. (000997.SZ) reported double- or even triple-digit growth in cross-border transaction volumes, merchant numbers, or overseas revenue.
Meanwhile, foreign players are accelerating their entry. Payoneer and SUNRATE secured Chinese payment licenses through acquisitions this year, while Airwallex continues expanding its transaction volume and client base in China.
Against tightening regulations, stricter oversight, and declining fee rates, cross-border payments have become a new arena for competition.
**Cross-Border Business as a Profit Driver** Q3 reports reveal that most payment firms still face downward pressure in their core businesses. Lakala’s revenue fell 7.33% YoY to RMB 4.07 billion, with net profit down 33.9%. However, its cross-border payment business grew robustly, with merchant numbers up 71.91% and transaction volume surging 77.56% to RMB 60.2 billion. The company cited overseas expansion as a structural growth driver.
Xgd Inc.’s cross-border brand PayKKa performed even better, offering multi-currency accounts in the U.S., EU, and Southeast Asia. In Q2 2025, its merchant count and transaction volume jumped 169% and 272% QoQ, respectively. The firm attributed its 37.1% net profit growth in the first three quarters to cross-border payments and announced plans for a Hong Kong IPO to fund global payment network expansion.
Newland Digital Technology Co.,Ltd. leveraged synergies between hardware and payments, with overseas payment device revenue up 26% YoY. Its subsidiary is accelerating license applications to offer integrated solutions for cross-border e-commerce.
Smaller players are also stepping up. Zhejiang China Commodities City Group Co.,Ltd. (600415.SH) reported a 35% YoY rise in cross-border transactions to RMB 27 billion, while Rendong Holdings Co.,Ltd. (002647.SZ) saw its payment unit’s cross-border revenue double, boosting parent company net profit by 356.65% to RMB 367 million.
**Why the Shift Overseas?** Industry consensus holds that cross-border expansion is no longer optional but a survival imperative.
Domestic payment markets are fiercely competitive, with high customer acquisition costs and squeezed fee rates. "Many firms operate at a loss in acquiring businesses," noted Wang Pengbo, chief analyst at Broadcom Consulting. "Cross-border payments offer significantly higher margins than domestic acquiring."
China’s 2024 import-export volume hit RMB 43 trillion, with cross-border e-commerce up 10.8% to RMB 2.63 trillion, driving payment demand. A payment executive noted that SMEs venturing abroad face pain points in settlement, FX collection, and compliance, creating "a second growth curve for local firms."
The RMB’s internationalization provides further support. SWIFT data shows the yuan accounted for 2.93% of global payments in August 2025, ranking sixth, while its IMF SDR weight sits third. Regulators are encouraging payment firms to facilitate cross-border trade and RMB settlements.
China’s 15th Five-Year Plan emphasizes advancing RMB internationalization and improving cross-border payment systems. The 2023 Non-Bank Payment Institutions Regulation clarified compliance boundaries, signaling a shift from "traffic-driven" to "license- and compliance-driven" competition.
**Foreign Players’ Strategic Moves** 2025 has been a landmark year for foreign payment licenses. Payoneer acquired a Chinese firm in April, joining PayPal and Airwallex as licensed foreign platforms. SUNRATE obtained a license via acquisition in August, quickly onboarding hundreds of Chinese exporters. Airwallex’s annualized transaction volume surpassed $200 billion post-acquisition, solidifying the "big four" foreign players.
Licenses offer compliance advantages and cost savings. Post-entry, firms like Airwallex are innovating in AI, launching multi-currency billing systems for automated reconciliation.
Local players are responding with tech and ecosystem strategies. Lakala integrates payments, SaaS, and AI, serving 8 million AI wallet users. Others showcase global coverage and partnerships to enhance cross-border convenience.
**Hidden Risks Amid Growth** Despite the boom, compliance remains critical. Over a dozen payment firms were penalized in H1 2025 for AML lapses, including major players. Overseas operations face complex data security and fund flow monitoring requirements.
Macro risks also loom. Broadcom Consulting forecasts cross-border internet payment growth may slow to ~10% in 2025 due to tariffs and geopolitics. With export e-commerce saturating and customer acquisition costs rising, industry consolidation is expected.
"Cross-border payment growth hinges on two tracks: supporting Chinese firms’ global trade and competing in overseas local markets," said Pan Helin, an expert at MIIT. "The first requires compliance and risk control; the second demands adapting to digital currencies and AI-driven payment trends."
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