Foreign companies granted third-party payment licenses

China's central bank Wednesday gave third party payment licenses to 27 companies, among which Edenred China and Sodexo Pass China (Shanghai) were the first foreign-funded companies to receive the licenses.

A total of 250 institutions have received third party payment licenses since the People's Bank of China issued the first one in May 2011. This is the first time that the PBOC has issued licenses to foreign payment companies.

Paypal, a subsidiary payment company of eBay, has yet to be granted a license.

Among the 27 companies, six companies including Baidu and Sina were granted permission to conduct Internet payment business. Another two institutions were allowed to do business of bank card acceptance. The rest of the companies received a nod to do business of prepaid card issuance and operations.

The issuance of the new licenses has little impact on the current structure of China's third party payment market, as the companies conducting prepaid card business account for about 60% of the market share, said Zhang Meng, an analyst with Analysys International.

Edenred China and Sodexo Pass China filed their applications for third party payment licenses in 2011. They now have obtained the proper licenses to conduct business of prepaid card issuance and operation.

Edenred China, with a registered capital of 100 million yuan, is owned by Edenred, a France-based company within the global prepaid business market. The company's China operations mainly cover Beijing, Shanghai, Wuxi and Chengdu.

Sodexo PassChina, with a registered capital of $9.8 million, is owned by Sodexo, a French multinational corporation headquartered in Paris. Its prepaid card business only covers Shanghai.

Statistics show that the market size of China's third party payment market surpasses 10 trillion yuan, according to a report last month from Payment & Clearing Association of China.