Cathay Pacific Haitong: Payment companies' marginal improvement, cross-border and AI become new highlights

The Zhitong Finance App learned that Cathay Pacific Haitong released a research report saying that the payment industry has reached an inflection point. Leading payment companies are benefiting from shrinking licenses and increasing market share, and cross-border business and payment+ business are developing rapidly. Domestic billing is optimistic about leading institutions with outstanding compliance advantages, leading bank card flow changes, and continuous market share growth; companies with complete license matrices, leading overseas localization, and deeply tied to the ecosystem of international e-commerce and card organizations; Payment+ is more optimistic that AI products will be the first to launch, can upgrade payment channels to “payment+SaaS” business services, and forward-looking card agent payment infrastructure.

Cathay Pacific Haitong's main views are as follows:

At the right time for the payment industry to improve, traditional billing businesses benefit from consumer incentives and license contraction

Receipt revenue is driven by both turnover and rate factors. Currently, both sides are at an inflection point: on the rate side, the central bank continues to cancel payment licenses and not issue new ones; non-compliant small and medium-sized institutions are expected to clear up at an accelerated pace. At the same time, vicious price competition is curbed, leading institutions have increased their bargaining power, and industry rates are expected to stabilize or even marginally rise, supporting the restoration of profit levels; on the flow side, consumer promotion policy combinations such as consumer loan interest rates continued to increase. Bank card consumption recorded the first positive change after 7 consecutive quarters of negative growth. The card receipt business has rebounded steadily, and the code scanning payment business is growing rapidly.

The increase in inbound and outbound consumption and the development of digital yuan will stimulate payment companies to lay out cross-border business

The cross-border payment market has broad space and growth momentum continues to be unleashed. E-commerce overseas, inbound consumption, and cross-border movement of people are driving the market expansion. The digital yuan further opens up incremental space: its peer-to-peer real-time settlement feature can solve the pain points of low efficiency and high cost of traditional cross-border payments, reduce the cost of payment institutions connecting to cross-border clearing channels, and provide support for the implementation of innovative businesses such as cross-border billing. At the same time, the profitability and competitive pattern of cross-border business are significantly superior to domestic ones: the average rate on the rate-side is higher than the domestic payment market; moreover, licensing, settlement, and compliance thresholds are high, participants are limited, and the pattern is in the form of a blue ocean. The overseas layout of leading companies has already paid off. Cross-border transaction amounts are rapidly increasing, and leaders in license matrices and ecological barriers to e-commerce and card organizations are expected to continue to seize the incremental market and cultivate cross-border payments as the second growth curve.

AI empowers the entire payment chain, and differentiated competition and SaaS revenue reshape business models

AIAgent is becoming a new transaction portal. According to Research Intelo, the global smart payment market is expected to reach 24% CAGR in 2026-2034. The AI layout of payment companies has covered the entire terminal, operation, and risk control chain. There are three ways to realize value: one is that AI products form a difference in service experience and promote market share increase; second, AI business tools are embedded in merchant operations and converted into subscription-based SaaS revenue. The gross margin is significantly superior to the main payment industry, becoming the second growth curve; third, the agent economy has spawned ultra-small high-frequency payments between machines Demand, the collection of micropayments opens up a blue ocean of new business models.

The payment industry is cyclical. Expectations on fundamentals affect valuation. Currently, the inflection point of improving fundamentals has arrived

Judging from history, whether policy-driven or event-catalyzed, they all played a role by changing the market's expectations of fundamentals. Currently, the payment industry is benefiting from policies and showing marginal improvements. Cross-border payments and AI+ have become new event catalysts, and the cost performance ratio of configurations is prominent.

Risk warning: Consumption recovery falls short of expectations; industry competition intensifies; AI technology implementation falls short of expectations.