Acquisition of payment license for one year Huawei officially entered the game Can it shake the existing pattern?

After Wang Qing, a reporter from the Economic Observer Network, successfully won the payment license in March 2021, Huawei officially entered the payment industry. On April 11, the reporter logged on to the Huawei wallet APP and noticed that the current Huawei payment has been officially launched and launched corresponding marketing activities.

At a time when WeChat Pay and Alipay have seized 90% of the market, can Huawei's choice to enter the game shake the existing payment industry pattern, and what are the odds?

In this regard, industry analysts said in an interview that Huawei's biggest competitive advantage is its own product ecosystem, but it will not change the pattern of the industry in the short term, digest internal convertible users, and it will take a long time to build a compliant and sustainable technology system.

Make efforts to promote marketing

In fact, Huawei publicly stated in the early years that it would "not apply for a payment license." However, since 2016, Huawei has continued to test the waters in the payment industry.

In August 2016, Huawei and China UnionPay jointly announced that HuaweiPay fully supports HuaweiPay, covering various payment innovative technology applications such as NFC. However, because there was no payment license at that time, Huawei was limited to the technical support level and could not carry out settlement business.

Since 2016, third-party payment licenses have entered the stock period, and the central bank will no longer accept applications for new licenses. In March 2021, huawei finally won the payment license as it wished by acquiring a 100% stake in a third-party payment company, Shenzhen Xunlian Zhifu Network Co., Ltd.

According to public information, Shenzhen Xunlian Zhifu Network Co., Ltd. obtained a non-bank payment business license in July 2014, and its business types are Internet payment, mobile phone payment, and digital TV payment, and its business coverage is nationwide. The types of business conducted include Internet payment and mobile phone payment, which are valid until July 2024.

In this regard, Wang Pengbo, a senior analyst in the financial industry of Broadcom Consulting, told reporters that having a payment license can help companies reduce the cost of payment channels while improving the level of compliance operations. In addition, after years of business development, some Internet platforms have accumulated a large amount of user traffic and data, using payment for precipitation, and can rely on commercial chains and scenarios to expand relevant value-added services and improve the ecosystem of their own platforms.

The reporter logged on to the Huawei Wallet APP and found that at present, Huawei Payment has covered Huawei applications and some third-party applications, including Huawei Music, Huawei Video, Hua Theme, HUAWEI CLOUD Space, Huawei Reading, Huawei Wallet, Mango TV, Youdao Cloud Notes, PP Video, etc. In addition, Huawei Pay supports the binding of more than 140 bank savings cards and more than 100 bank credit cards, including China, Agriculture, Industry, Construction, Postal Savings, and China Merchants Bank.

At the same time, Huawei Pay launched the first marketing campaign to tie the bank card payment randomly. For example, the first time the bank card is bound to pay a reduction of 5 yuan, Huawei pays the old user a random reduction of up to 288 yuan, and receives Free Huawei Film and Television membership.

In this regard, some payment industry insiders told reporters that the number of Huawei mobile phone users has reached 200 million, and this round of marketing activities may help it complete the conversion of some users in a short period of time.

A paying circuit lined with giants

In recent years, after Internet giants such as Ali and Tencent have won payment licenses, Internet companies such as ByteDance and Pinduoduo have also entered the payment track.

With the rapid development of the mobile payment industry in mainland China, a "duopoly" pattern of WeChat Pay and Alipay occupying the nine layers of the market has been formed.

At the same time, the growth rate of the payment market is also slowing. According to the "Annual Thematic Analysis of the Non-bank Payment Industry 2022" report released by Broadcom Consulting, it is estimated that the scale of mobile payment transactions will reach 30.39 billion yuan in 2021, an increase of 14% over the same period last year. From 2014 to 2021, the scale of mobile payment continued to grow, but the growth rate has dropped from the previous over 100% to the 10%-20% range in the past two years. The main reason for this is that the development of the mobile payment market has become mature, the overall technology is larger, and the C-end traffic has gradually peaked.

At this time, what are the considerations for Huawei Payment to officially enter the game?

Yu Baicheng, president of Zero One Research Institute, believes that after the strengthening of anti-monopoly supervision in the payment industry, the market share of Alipay and WeChat Pay may decline, coupled with the interconnection of the payment field and the opening of head payment institutions, providing an entry opportunity for Huawei Payment.

"Huawei's greatest competitiveness is reflected in its own product ecosystem, such as the vast number of users of Huawei mobile phones and related ecological products, the recognition of huawei brands by the Chinese people, and the influence on the upstream and downstream supply chain of Huawei mobile phones." Wang Pengbo said.

Whether Huawei's entry into the mobile payment industry will shake the existing pattern has become the focus of market attention.

Wang Pengbo believes that as a basic service industry, the overall pattern of the payment industry will remain stable, and the industrial chain link will be clearer after years of competition. Huawei's entry will not change the industry's pattern in the short term, and it will take a long time to digest internal convertible users and build a compliant and sustainable technology system. In the future, with the continuous advancement of interconnection, major mobile traffic portals have launched their own payment wallets for user conversion, and there is also the possibility of gradually disintegrating the existing payment industry pattern in the future, but it is expected to wait for a new generation of technological innovation to drive user transfer.

"It is recommended that Huawei start from the basics, pay attention to compliance construction, do not blindly expand investment in the short term, and consider the balanced and benign development of revenue." At the same time, we can also consider using payment to drive and connect its own impact on supply chain manufacturers, and make supply chain finance bigger and stronger and consumer finance for C-end users. Wang Pengbo said.