Credit card fees reduced by 7.4 billion acquirers facing shuffling Wuhan pos machine where to go?
This policy adjustment, although the overall third-party payment income has declined, but the impact on different acquirers is not the same. For an organization with a single business and lack of industry competitiveness, the adjustment of the rate undoubtedly reduces the already marginal living space.
Over the years, UnionPay’s income status has been secretive to the outside world. According to the available financial data, as of the end of 2012, UnionPay's total assets reached 25.35 billion yuan, net profit reached 1.836 billion yuan, and net profit increased by more than 18 times in five years.
On March 26, UnionPay passed the 14th birthday. Before the birthday, UnionPay received a unique gift.
On March 18th, the Central Bank's United Nations Development and Reform Commission issued a notice to further improve the pricing mechanism for bank card credit card fees, and generally reduced the fee level. According to estimates by the National Development and Reform Commission and the central bank, after the rate is lowered, each type of merchant can reduce the credit card fee by 7.4 billion yuan per year.
The reduction of the cost of 7.4 billion yuan, the other side means the loss of 7.4 billion yuan in revenue. "The best thing about this new regulation is the merchants. The benefits of UnionPay, banks and third-party payments will be affected." A third-party payer who is not well-known has told reporters that under the new charging mechanism, the issuing bank will accept The unilateral and UnionPay revenues will be reduced in terms of card processing fees, and the largest proportion is the issuing bank.
At present, the credit card processing fee does not involve consumers, only the merchants are charged. The credit card rate is divided into 7 (issuing bank): 2 (acquisition agency): 1 (UnionPay), except for UnionPay’s exclusive 1, UnionPay is still in the acquiring institution. It occupies a certain share. Due to the large number of issuing banks, UnionPay is undoubtedly the biggest buyer of the 7.4 billion yuan card fee reduction.
After the new rules are calculated, UnionPay’s credit card fee income will be reduced by about 20%. UnionPay will not comment when responding to reporters. As for whether the minimum loss of 10% of the 7.4 billion yuan is 740 million yuan, UnionPay only responded that it cannot be calculated so easily. The algorithm is more complicated and there is no digital disclosure.
According to a person close to UnionPay, the new rules have an impact on the income of UnionPay in the short term. After all, the rate level has dropped. But in the long run, this new regulation solves some problems in the development of the industry, such as the problem of set-ups and credit card cashing.
Impact of UnionPay Receipt Profit
In the new regulations released on March 18, the rules for the issuance of the issuing bank and UnionPay are clarified. The issuing bank's service fee debit card shall not exceed 0.35% of the transaction amount, and the credit card rate shall not exceed 0.45%. Among them, the network service fee charged by UnionPay to the issuing bank and the acquiring institution shall not exceed 0.0325%. That is to say, for each transaction, the total fee of UnionPay from the other two parties is 0.065%, and the single ticket does not exceed 6.5 yuan.
As the overall rate is greatly reduced, the profit margin of the fee is further squeezed, which brings greater challenges to third-party payment institutions, UnionPay and other stakeholders. Under the 7:2:1 split ratio mechanism, the bank card credit card payment interest chain is involved up and down.
UnionPay bears the brunt of the loss of 7.4 billion yuan in revenue. It is estimated that after the new regulations, UnionPay's income on credit card processing fees will be reduced by about 20%. However, this figure has not been confirmed by UnionPay. When UnionPay responded to the reporter, it only said that China UnionPay, as a bank card organization, will continue to adhere to the concept of openness, cooperation and win-win, and build a comprehensive payment platform with higher inclusiveness and functionality, in a more market-oriented manner. Good business development of member institutions, merchants and industry parties.
In fact, over the years, UnionPay’s income status has been secretive to the outside world. According to the available financial data, as of the end of 2012, UnionPay's total assets reached 25.35 billion yuan, net profit reached 1.836 billion yuan, and net profit increased by more than 18 times in five years.
According to the analysis of China Merchants Securities, after the fee reduction, the interest rate of UnionPay will be reduced, but the rate of credit card payment has been equal to Alipay, which is conducive to the attraction of POS payment system under the UnionPay line to merchants and the improvement of transaction flow within the system. . It is expected that the liquidation market will be liberalized in the second half of the year, and the rates will be unified and reduced, which will help improve the competitiveness of UnionPay in the face of international giants such as Visa.
In order to avoid single income, UnionPay is also undergoing diversification in these years, so the profit is not solely dependent on fees. At present, China UnionPay's operating income structure is mainly: first, domestic ATM income, such as handling fees collected in cross-bank withdrawals; second, domestic POS transaction transfer income, that is, the commission portion of credit card merchants; third, international business income; fourth, some Innovate business revenue, such as mobile payments.
On March 21, China UnionPay and Huawei jointly announced the promotion of Huawei Pay service on Huawei mobile devices. Recently, UnionPay has also entered into cooperation with Pay and Samsung Pay. Previously, UnionPay has released a cloud flash payment product based on the NFC-HCE solution.
The above-mentioned close to UnionPay said that the current "PAY" real payment methods for mobile phone manufacturers are actually behind the UnionPay cloud flash payment, which are based on the UnionPay cloud flash payment infrastructure and standard system. "Competing between mobile phone manufacturers, UnionPay is a payment platform. All partners are welcome to cooperate. For users, radish cabbage has their own love, more choices, why not."
Bank individual impact is limited
Yin Zhentao, deputy director of the Institute of Finance and Finance of the Chinese Academy of Social Sciences, told reporters that UnionPay itself is also a mode of payment with third parties, but actually cooperates with banks more, and the intermediate UnionPay charges are divided into pricing mechanisms. "The reduction in credit card fees and UnionPay is not necessarily a shock relationship. It is just the question of who the money is and how much it is adjusted."
Yin Zhentao further analyzed that the rate reduction is good for both UnionPay and third-party payment. "Because this move is to change everyone's consumption habits, it is not necessarily to use the bank channel, but to let everyone get used to the payment channel to solve their own problems, reduce cash payments, and bring card swipe habits."
At present, the phenomenon of “sets of codes†in the industry is very serious. Many acquirers will provide commodity category codes for low-cost industry for merchants in high-rate industries, disrupting market competition.
Yin Zhentao told reporters that the purpose of the unified rate is to suppress the existing industry set code problem. "The purpose of its own policy is this, but it does not rule out countermeasures. Originally, the card swiping agency must find the lowest cost line to shop, the industry will have arbitrage behavior, and the purpose of the flat rate is to avoid the gap through the spread, but not After excluding the unified price, there will be other holes."
The biggest impact of this new regulation is the bank. The rate reduction will undoubtedly have an impact on the income of the card-printing business, but it will be spread to individuals and the impact will not be great. The results of the calculation of Orient Securities show that the 23%-24% fee discount will reduce the net profit of listed banks by an average of 1 percentage point. Retail banks are more affected, such as Everbright, Minsheng and China Merchants Bank. "In terms of individuals, in addition to security, the most affected are Everbright, Minsheng, and CITIC, and most of the other impacts are within 1%," said Li Yamin, chief financial analyst at Ping An Securities.
The acquiring institution faces shuffling
This policy adjustment, although the overall third-party payment income has declined, but the impact on different acquirers is not the same. For an organization with a single business and lack of industry competitiveness, the adjustment of the rate undoubtedly reduces the already marginal living space. "There is no agent for acquiring a license, relying on the transfer of the interface, the third-party payment enterprise without physical business, it will become more and more difficult. The new policy is the service, in the short-term, it will be the rate of war to take the merchant, but all In the end, it’s all cost.†Yinsheng Financial’s insiders told reporters that the third-party payment industry has really entered the era of fighting for service and value-added, and competition has become increasingly hot.
“Policy guidance is to allow third-party payment industry to further reshuffle.†Yin Zhentao told reporters that as an infrastructure, payment does not require too many payment institutions. In addition to the rapid growth period of the previous period, in addition to the fierce competition in the industry, the management and supervision of policies are bound to be more perfect, and this industry will also have more and more restructuring, mergers and acquisitions, shuffling, Adjustment and other phenomena. "Under this trend, companies that do not have core competencies, including some third-party payment institutions that have not cooperated with banks and do not have the lead, will face great problems."
By the end of 2015, there were 62 payment institutions that had obtained the approval of the central bank to obtain bank card acquiring business, including 43 national acquiring licenses and 19 regional acquiring licenses. Judging from the competition pattern of the current industry, the polarization is more serious. Commercial banks' self-operated POS networks occupy the main market, accounting for 44.8%; UnionPay's UnionPay business accounts for 39.4%; while the rest of the market is charged by third parties. The organization divides. Guotai Junan Research reported that if the differentiated services are not large, all parties may fall into price competition, including UnionPay charges (if other clearing institutions appear). The rate may drop very low at that time, and for those third-party acquirers whose income is large, they may face life and death.
"This policy adjustment, although the overall fee for merchants has declined, has different impact on the acquiring institutions. It is a major positive for large-scale acquiring institutions with a certain scale." Tang Ling, senior vice president of Lakara told Reporter, because Lakara not only provides billing services, but also provides credit, credit, factoring, financial leasing and other services, users are more viscous and better service. According to the internal evaluation of Lacala, the rate adjustment has little effect on its profit. Guan Guoguang, Chairman and CEO of Fast Money, also said that in the future, third-party payment will be more oriented towards a comprehensive platform.
After the new rules are calculated, UnionPay’s credit card fee income will be reduced by about 20%. UnionPay will not comment when responding to reporters. As for whether the minimum loss of 10% of the 7.4 billion yuan is 740 million yuan, UnionPay only responded that it cannot be calculated so easily. The algorithm is more complicated and there is no digital disclosure.
Over the years, UnionPay’s income status has been secretive to the outside world. According to the available financial data, as of the end of 2012, UnionPay's total assets reached 25.35 billion yuan, net profit reached 1.836 billion yuan, and net profit increased by more than 18 times in five years.
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