(Yicai) Jan. 5 -- After new regulations for non‑bank payment companies took effect in China last April, the sector underwent big changes, with leading players having hiked their registered capital and expanded into cross‑border markets, while many smaller firms lost their licenses.

More than 20 non-banking payment firms increased their registered capital last year, according to data from the People's Bank of China and compiled by Yicai. For example, WeChat's payment platform Tenpay was approved to raise its capital by CNY7 billion (USD1 billion) to CNY22.3 billion (USD3.2 billion).

The new regulations came into effect on April 30, after a one-year grace period. They require non-banking payment institutions to have minimum paid-in capital of CNY100 million (USD14.3 million) and set higher standards for risk management and capital adequacy ratio.

A stronger capital base enhances an institution’s ability to allocate funds, manage risk, and build robust systems, said Wang Pengbo, chief financial analyst at Broadcom Consulting. As compliance costs for issues such as anti‑fraud and anti‑money‑laundering grow, capital increases serve not only to satisfy regulatory requirements but also to secure room for business expansion, he added.

China now has 164 licensed payment services providers after 107 permits were revoked in 2025, nearly 80 percent of which were for prepaid-card businesses, according to the PBOC data.

Amid intense competition, many Chinese players are seeking opportunities in the cross-border payments sector. In the first three quarters of last year, Lakala Payment’s trans‑border transaction volume rose almost 78 percent from a year earlier, while that of LianLian DigiTech and CoGoLinks surged 94 percent and 170 percent, respectively.

This phenomenon is driven by the boom in cross-border e-commerce and wider profit margins. While domestic payment fees have been stable at 0.6 percent for a long time, cross-border fees range from 2 percent to 3 percent, an industry source told Yicai.

Moreover, cross-border payment companies provide value-added services, such as multi-currency settlement, exchange rate risk management, and supply chain finance, leading to wider gross profit margins, the person added.

Despite the opportunities, cross-border payments also present challenges, such as information asymmetry and multi-market risks, industry insiders warned. It is crucial to have a deep understanding of the safety and compliance risks associated with each market, along with robust risk control and anti‑money‑laundering capabilities, they said.

Editor: Futura Costaglione