(Yicai) Oct. 31 -- Cross-border payment services are emerging as a fast-growing segment for Chinese payment firms, sustaining double-digit growth in client merchant numbers and transaction volumes when the home market has slowed.

Lakala Payment, the first major online payments platform to go public in the Chinese mainland, saw cross-border transactions surge 78 percent in the three months ended Sept. 30 from a year ago, while the number of vendors using its services soared 72 percent, the Beijing-based firm said. By contrast, its profit and revenue fell 34 percent and 7.3 percent in the same period.

Newland Payment Technology noted in its latest earnings report that the continuous growth in its trans-border payment business was one of the core drivers of profit growth in the first nine months of the year. The Fuzhou-based company plans to go public in Hong Kong and use the proceeds to build a global network and secure overseas licences.

The potential for new growth in China’s domestic payments market is small, while the profit margin for cross-border services is generally much higher than that inside the country, Wang Pengbo, chief analyst at Broadcom Consulting, said in regards to why providers are pivoting overseas.

Small and medium-sized Chinese payment firms are also hastening their overseas expansion. Yizhifu, a platform under the world's largest small commodity wholesale market Yiwu International Trade City, saw trans-border payments jump 35 percent in the first three quarters of this year.

But the boom entails risks, according to Pan Helin, a member of the Ministry of Industry and Information Technology's expert committee on the information and communications economy. 

Cross-border payments encompass two main businesses: servicing Chinese firms’ foreign trade and outbound investment payment needs, where success hinges on compliance and risk controls; and operating in local payments markets abroad, which requires mastery of new technologies like digital currencies and artificial intelligence along with adapting to local payment preferences, Pan said.

Editors: Tang Shihua, Martin Kadiev