Electronic payment service providers need to prepare for major changes in the competitive environment with new threats from the retail sector rather than the banking sector. Retail giants Pxmart Co and Taiwan Family Mart Co, which have a large customer base, will get a portion of the pie after being allowed to enter the electronic payments market.
This approval recalls the memory of about 10 years ago when traditional banks in the country struggled to make a profit in the banking overmarket following over-issuing credit cards. The difference this time is that competitors are coming from multiple directions, not just within the banking sector.
Market competition is also fierce, and the recent rapid growth in online shopping and electronic payments may not subside after the local COVID-19 outbreak has subsided. According to the latest statistics from the Financial Supervisory Commission (FSC), the number of users of electronic payment services has skyrocketed from 8.29 million in the same month last year to 13.15 million in April.
To strengthen its position in the online payments market, Pxmart, one of the country’s largest supermarket operators, plans to introduce an electronic payments service via PXPay by the end of this year after receiving FSC approval on Thursday. is.
Approval means that Pxmart is not limited to PXPay, but can offer transactions between different payment platforms. This also paves the way for Pxmart to expand its offerings to other online banking services such as foreign currency accounts and vouchers, turning supermarket chains into microbanking service providers.
Pxmart favors potentially challenging electronic payment service providers, led by Jko Pay of Jko Fintech Co, which has more than 7.2 million registered members and 4.43 million members as of April, and is the largest in the country. It is an electronic payment service provider of.
In addition, Pxmart has built a strong non-cash trading base, with one-third of its revenue generated through its online payments platform, PXPay, the company told Weekly Business Next in Chinese. The goal of supermarket operators is to increase their share to 40% this year in preparation for a strong start to launch a new electronic payments service later this year.
FamilyMart shares the same ambitions. Convenience store chains aim to debut their electronic payment services in the fourth quarter of this year through All Win Co in collaboration with E.Sun Commercial Bank and PiMobile Technology Inc. The paid-up capital is NT $ 760 million (US $ 27.23 million). , All Win is a three-way venture with 67% for FamilyMart, 18% for E.Sun, and 15% for Pi Mobile.
Given FamilyMart’s large membership base of 13 million customers and 3,800 stores nationwide, AllWin could also emerge as a major rival to existing electronic payment service providers.
Convenience store operators said online payments surged as customers avoided shopping directly to avoid COVID-19. According to FamilyMart, contactless payments have grown rapidly this year, accounting for half of their revenue. It offers contactless payments via Family Pay and Family e-wallet, with a total of over 1 million members.
As the line between retail and banking blurs, local banks and electronic payment service providers need to investigate new user scenarios and rethink their core values to avoid a recurrence of price competition. .. Market share and membership may not be as important as it once was.
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https://www.taipeitimes.com/News/editorials/archives/2021/06/29/2003759975 Editorial: Banks Need to Prepare for Retail Challenges