🇨🇳 Payments in China

The market map: four layers, not two brands

China’s payment system has two distinct tiers: the apps the public uses and the interbank infrastructure that carries the flows. Alipay and WeChat Pay are interfaces, and the rails beneath them form four layers of infrastructure, all run or controlled by the People’s Bank of China (PBoC). They include a high-value RTGS (HVPS), a bulk ACH (BEPS), and a 24/7 instant credit transfer rail (IBPS). Then come a card switch (CUPS, run by China UnionPay) and a clearing house dedicated to non-bank institutions (NetsUnion). In the professional literature, “Chinese instant payments” means IBPS, not Alipay.

Two more clearing systems serve regional banking networks with wide geographic reach. The Rural Credit Banks Payment & Clearing System (农信银支付清算系统) has been run since 2006 by the Rural Credit Banks Funds Clearing Center. It serves the thousands of rural credit cooperatives that are not directly connected to CNAPS (476 million transactions in Q2 2025). The second is the city commercial banks clearing system (城市商业银行资金清算中心). On the wholesale side, the Shanghai Clearing House (SHCH, 2009) handles the interbank market, and the 上海票据交易所 (Shanghai Commercial Paper Exchange, 2016) handles dematerialized commercial paper.

The PBoC is the sole regulator. The rules for non-bank institutions were tightened by State Council Decree No. 768 (Regulations on the Supervision and Administration of Non-bank Payment Institutions). Signed by Li Qiang, it took effect on May 1, 2024. It sets a minimum paid-up capital of RMB 100 million and applied in full once the grace period ended on April 30, 2025. The number of active licenses then fell. China had 164 licensed payment institutions at the start of 2026, after 107 licenses were revoked in 2025, nearly 80% of them prepaid card licenses.

Alipay and WeChat Pay: what the duopoly really covers

China’s mobile payment duopoly refers to the concentration of phone-initiated payments in two apps that together handle the bulk of them. Alipay (支付宝) was launched in 2004 by Ant Group (part of the Alibaba group). WeChat Pay / Weixin Pay (微信支付) runs on Tenpay (财付通), Tencent’s licensed entity, authorized since 2005. The OECD’s June 2025 competition background note puts their shares of China’s mobile payment market at ≈ 54% and ≈ 42% respectively. Their commercial roots differ, and so do the use cases each one covers. Alipay grew out of e-commerce and Taobao’s escrow service. WeChat Pay grew out of social messaging and the hongbao (红包, the digital red envelope), which gave it P2P payments and the smallest merchants.

Chinese QR payments come in two modes, defined by which way the scan goes and who initiates it. In 付款码 mode (B-scan-C, also called consumer-presented), the customer displays a dynamic barcode and the checkout scans it. The debit is immediate and the POS system drives the transaction, which makes this the mode of large stores and chains. In 收款码 mode (C-scan-B, also called merchant-presented: the merchant’s static QR code), the customer scans a printed code, enters the amount, and confirms. This second mode needs no hardware and no integration, and street vendors use it. The two modes differ in pricing, settlement times, and fraud controls.

• Mini-program (小程序): the dominant channel for in-app commerce. It requires a verified Chinese entity (主体) and registration, which is the first roadblock for a foreign merchant without a local subsidiary.
• JSAPI / in-app: payment triggered inside the WeChat or Alipay browser, without leaving the app. It has the highest conversion rate in the market.
• H5 / external mobile browser: payment outside the app. It is more fragile (app switching, drop-offs) and faces tighter fraud controls.
• Printed static QR code: no development work, but manual reconciliation and lower amount limits make it unsuitable wherever there is a POS system.
• QR interoperability: since 2021, under a PBoC mandate, Alipay, WeChat Pay, and UnionPay can each scan the others’ offline barcodes. A single QR code can therefore be enough, but interoperability does not cover every online flow.

NetsUnion: the invisible switch that put the central bank back in control

The NetsUnion Clearing Corporation (网联清算有限公司, NUCC), set up in 2017, is the clearing house for online payments made through Chinese non-bank institutions. Before it existed, Alipay and Tenpay connected directly to hundreds of banks, each under its own bilateral agreements. That had three consequences. The central bank had no view of the flows. Payment institutions played banks off against each other, and the float on customer funds sat in commercial bank accounts. In June 2018, all non-bank online payments had to start going through NetsUnion, a move known as 断直连, “cutting the direct connections.” From then on the central bank could see the flows, and payment institutions no longer chose their settlement bank. Customer funds were handled under a separate deadline, shown in the timeline below.

UnionPay, CUPS, and the card that didn’t disappear

UnionPay (中国银联) is the brand and the commercial scheme, created in 2002 by China UnionPay Co., Ltd. under PBoC oversight. CUPS (银行卡跨行支付系统) is the card authorization and clearing infrastructure the company operates. Its subsidiary UnionPay International, set up in 2012, drives expansion outside mainland China. The brand and the infrastructure are two different things. More than 200 million cards have been issued outside the mainland, and UnionPay claims acceptance in more than 180 countries and territories (UnionPay International press releases, 2024–2025).

In China, interchange is not set by the scheme. It is administered by the state. The fee schedule comes from a joint notice by the National Development and Reform Commission (NDRC) and the PBoC, reference 发改价格〔2016〕557号. Published on March 18, 2016, and in force since September 6, 2016, it caps the issuer fee and the network fee and leaves the acquiring fee to the market.

UnionPay pushes its own payment methods against the wallets, starting with QuickPass (闪付), the EMV contactless service launched in 2015. Cloud QuickPass (云闪付) is the app backed by the banks and promoted by the government. It also carries UnionPay’s cross-border QR interoperability (mutual recognition agreements, including one signed with BKM in Turkey in November 2025). UnionPay claims more than 650 million users of its QR code, without giving a reference year. That number is a marketing order of magnitude rather than a verifiable statistic.

The number of credit and combined cards is falling: 721 million at the end of March 2025 and 715 million at the end of June 2025 (PBoC). Chinese consumer credit has shifted to products built into the wallets: Huabei (花呗) and Jiebei (借呗) from Ant Consumer Finance, and JD Baitiao (京东白条) from JD Technology. More than 80% of new Huabei users in 2024 had never held a credit card. For them, consumer credit started in the wallet, with no card ever issued.

Opening up: Amex, Mastercard, and cards held by foreign visitors

For 20 years, clearing renminbi card payments inside China was a de facto UnionPay monopoly. That monopoly ended in 2020, when the PBoC granted a card clearing institution license to a Sino-foreign joint venture. Two such joint ventures now hold that license and clear in renminbi on the domestic market.

The rules for foreign visitors changed in 2023–2024. Until then, tourists needed a Chinese bank account to use Alipay or WeChat Pay; the only alternative was to find a terminal that took international cards. The General Office of the State Council published action plan 国办发〔2024〕10号 on March 7, 2024. It makes acceptance of a range of payment methods mandatory at priority locations: large shopping malls, tourist sites, museums, hotels, transportation hubs, and hospitals. It also requires terminals to be upgraded to take foreign cards.

Accepting payments in China as a foreign merchant

For a foreign merchant, accepting payments in China covers two situations that differ both legally and operationally. Selling in China requires a Chinese entity, a business license (营业执照), an RMB bank account, and a local acquiring contract. Funds are then collected and settled in RMB, inside China. Selling to Chinese customers from abroad is a cross-border setup. The customer pays in RMB; the payment institution reports the transaction under foreign-exchange controls, converts the funds, and settles the merchant in foreign currency outside China.

• Check the provider’s license. Ask for the payment institution license number issued by the PBoC and confirm that “online payment” is within its authorized scope, plus SAFE registration if the flow is cross-border. An unlicensed intermediary that pays out from its own account is a risk of frozen funds, not a saving.
• Check the aggregator’s registration. Acquiring outsourcing service providers (收单外包服务机构) must be listed in the registry kept by the Payment & Clearing Association of China (中国支付清算协会). A lookup takes seconds, and an intermediary missing from it is operating outside the framework for acquiring outsourcing.
• Pick the channel before the provider. Mini-programs, in-app, H5, and QR differ in entity requirements, pricing, and conversion rates. The channel determines which provider to choose, so a contract signed before the channel is decided will have to be renegotiated.
• Set refund terms in the contract. A refund must go back through the original channel, within the window the operator allows, and a cross-border refund is not converted at the sale’s exchange rate. Either the merchant or the customer bears the FX difference, and the contract says which.
• Treat personal data as a workstream of its own. China’s Personal Information Protection Law (个人信息保护法, in force since November 1, 2021) strictly regulates data transfers out of the country. Any integration design that sends payment data to a system outside China needs a legal assessment before it is built.

What it costs, and how to reconcile

The cost of acceptance in China is made up of fees with different legal status. Half of it is regulated and therefore non-negotiable; the other half is entirely free. For cards, notice 发改价格〔2016〕557号 caps the issuer and network fees and leaves acquiring to market pricing. For wallets, no component is regulated. The rate is a commercial price, published by the operator and adjustable by the provider.

Acquiring is dominated by ChinaUMS / UnionPay Merchant Services (银联商务), a UnionPay subsidiary set up in 2002 and the country’s largest merchant acquirer. Companies such as Lakala (拉卡拉) operate alongside it. A layer of aggregators and outsourced service providers sits between these acquirers and small merchants. That last layer is where the rate a small merchant actually pays gets set: the operator publishes a list rate, and the outsourced provider adjusts it before quoting it. Questionable practices cluster there, which is why the Payment & Clearing Association of China keeps the registry of outsourcing providers mentioned above.

TRANSACTION IDENTIFIERS
  out_trade_no      MERCHANT reference (yours: unique, idempotent)
  transaction_id    WeChat Pay reference      | trade_no  Alipay reference
  trade_state       WeChat Pay status         | trade_status  Alipay status
  amount.total      amount in fen (1/100 RMB) | total_amount  amount in RMB
  success_time      success timestamp         | gmt_payment   success timestamp

TWO DIFFERENT STATEMENTS, RECONCILED SEPARATELY
  transaction statement   what customers paid    (WeChat: /v3/bill/tradebill)
  fund flow statement     what was PAID OUT      (WeChat: /v3/bill/fundflowbill)
  Alipay side: alipay.data.dataservice.bill.downloadurl.query

RULE: NEVER reconcile the transaction statement against the bank transfer.
      Fees are deducted at source; only the fund flow statement explains
      the gap between what customers paid and what was paid out.

e-CNY, CIPS, and cross-border flows

The e-CNY (数字人民币) is the central bank digital currency issued by the PBoC through its Digital Currency Research Institute. It has been in pilot since 2019 and still has not officially launched, yet no other retail CBDC trial in the world comes close to its scale. Press reports citing the PBoC put cumulative transactions at RMB 16,700 billion as of the end of November 2025; the Atlantic Council’s CBDC Tracker counted more than 3.4 billion transactions as of December 2025. Distribution is two-tiered: the PBoC issues the currency, and licensed operating institutions make it available to the public. There were 22 of these institutions at the start of 2026, after 12 more banks were approved.

For yuan flowing into and out of China, the infrastructure is CIPS (人民币跨境支付系统), run since 2015 by CIPS Co., Ltd., a company licensed and supervised by the PBoC, which is also its largest shareholder. It is a hybrid system that combines real-time gross settlement with deferred net settlement. It also handles the Hong Kong dollar. The network had 210 direct participants and 1,619 indirect participants as of June 30, 2026 (official CIPS website).

Two more pieces complete the cross-border picture. The first is Payment Connect (跨境支付通), launched on June 22, 2025 by the HKMA and the PBoC. It links the mainland’s IBPS directly to Hong Kong’s Faster Payment System, with real-time transfers to a mobile number or account number, and six institutions on each side at launch. Hong Kong-to-mainland transfers are capped at HK$10,000 per day and HK$200,000 per year, per institution. Mainland-to-Hong Kong transfers count against Chinese residents’ annual foreign-exchange quota, equivalent to US$50,000 per person.

The second is a private layer of cross-border payment providers that carries the proceeds of Chinese sellers on Amazon, eBay, and Shopee. PingPong has more than 750,000 business customers and over $300 billion in annualized volume as of June 30, 2026. LianLian Global (连连数字) reported RMB 452.4 billion in total payment volume and more than 10.4 million cross-border businesses served at the end of 2025. XTransfer has more than 800,000 business customers and local accounts in some 60 countries. These providers have replaced the traditional correspondent bank, which exporting SMEs lost access to once anti-money-laundering rules tightened. Official inventories do not list them. A picture of Chinese cross-border payments limited to CIPS and Alipay+ therefore misses the layer that carries merchant proceeds.

What breaks, and the dates to watch

The rules of China’s payments market are written down and published, mostly by the PBoC and by the agencies that regulate alongside it: the NDRC for the card fee schedule, and the State Council for the payment institution regime. The misconceptions below are the ones that come up most often in projects. The table sets each one against the text or figure that disproves it.

• Entity before technology. The mini-program, the best-performing channel in the market, requires a verified Chinese entity. No integration trick gets around that.
• Two QR codes, two regimes. The code the customer presents (付款码) and the code the merchant displays (收款码) differ in limits, pricing, and fraud obligations.
• Currency units. Fen (hundredths of a yuan) at WeChat Pay, decimal yuan at Alipay: any team that integrates both without checking is heading for a factor-of-100 error.
• Refund windows. The operator sets them, they are shorter than the card dispute deadlines Europeans are used to, and refunds must go back through the original channel.
• Data. The Personal Information Protection Law (个人信息保护法, November 1, 2021) regulates data transfers out of China, so integration architecture is as much a legal question as a technical one.
• Purchased licenses. Several platforms have built captive wallets by buying an existing license instead of applying for one: 快手支付 (Kuaishou Pay), 多多支付 (Duoduo Pay, Pinduoduo; change of ownership approved in March 2025), and 度小满支付 (Du Xiaoman Pay, formerly Baifubao, Baidu). A license has become a tradable asset for controlling the value chain: the current holder is not always the institution the PBoC originally licensed.