Payment Systems: China gears up for e-payments

It is difficult to over-estimate the challenges in bringing modern banking to China. Although in recent years communications technology and modernised banking practices - and management systems - have improved the situation it remains the case that many communities are woefully underserved by mainstream banking and isolated by problems in payment services.

The development of e-payment systems is seen as a strategic necessity to bring remote communities and the urban poor into the broader financial system.

At the pointy end of this development is payment services provider 99Bill and yesterday it announced deals with nine major Chinese banks to improve access to banking services.

Working with China Construction Bank, the Agricultural Bank of China, the Bank of Communications, China Merchant's Bank, the Pudong Development Bank, China Minsheng Bank, the Guangdong Development Bank and the Shanghai Rural Commercial Ban, the company says that the arrangements "will enable secure and reliable payments transactions among these established banking institutions with 99Bill's innovative e-payment solutions."

At first sight, that seems like marketing gobbledook - but it isn't. In the Chinese market, 9Bill is indeed delivering innovation. It is China's third largest payment services provider and expects "unprecedented growth" after it met "six of the People's Bank of China's" seven "business scopes."

The numbers are mindboggling: as at the the end of June 2011, 99Bill had signed up a total of 97 million registered users and more than 1,000,000 merchant partners. To put that in perspective - it has four times the population of Australia as registered users - and more than the entire population of the UK.

Its corporate customer base is a who's who of Chinese businesses: include Eastern Airlines, Southern Airlines, Ping An Insurance, Xinhua Insurance, New Oriental Education, EF Education, Jinjiang Inn, 7Days Inn, NetEase, Sohu, Baidu, TOM, Dang Dang, Kodak, Digital China, HiChina, Gome and Shop365.

The company says " In addition, 99Bill also supports payment via major international cards, such as VISA and MasterCard. The company’s services currently cover a total of 3,000 million domestic and international bank cards"

That's one for almost half of the world's population (which is, itself, a disturbing statistic showing that many users have multiple cards - a sign of potential credit-based problems being stored up for the Chinese economy).