iPaynow, who calls itself the official US agent of Tencent’s online payment service Tenpay, is acquiring clients in the US, offering cross-border payment solution on behalf of Tenpay, according to a business brief we received from it.
It’s been only two months since Chinese authorities finally allowed local independent payments services to process international payments online and authorized 17 such services, including Alibaba’s Alipay and Tencent’s Tenpay, to conduct certain categories of cross-border online payments.
It echos the fact that Chinese consumers are purchasing increasingly more goods from overseas. Alipay found that online purchases by Chinese from overseas more than doubled in 2012 than that in the previous year. Apart from online shopping, China market also sees rising demand in payments for cross-border flights, outbound travels, overseas tuition fees, etc.
Before the direct payments with those payments services became possible, a large percentage of overseas purchases were through Chinese e-commerce marketplaces like Alibaba’s or Tencent’s where retailers buy goods from overseas and accept payments from local consumers through Chinese payments services like Alipay and Tenpay. Payments with credit card are still not prevailing in China.
As Chinese payments services now are allowed to accept payments for merchants overseas, Chinese users can pay overseas businesses or other organizations directly with their Chinese bank accounts. iPaynow says merchants outside China can price their goods in a foreign currency or RMB. It will deduct a payment from a buyer’s account in RMB and settle with the merchant in foreign currency real-time.
iPaynow has reached partnership with 25 Chinese banks, claiming that covers 99% Chinese bank card holders. It promises the settlement takes only one business day and the fee rate is down to 3%.
As a partner of Tencent, the service also offers support for Tencent QQ IM, the most used IM service in China, and share login service which provides easy login for Chinese users, for merchants outside China to engage Chinese users and do marketing.
Both Tencent and Alibaba’s Alipay are actively expanding in cross-border payments. In early this year, Tenpay announced it would support American Express for overseas purchases.