Financial Services Talking Points | 12/10/2017

In today’s talking points: China moving towards a cashless society; Growth of internet credit services; Authorities support for domestic investment reflected in China’s rich list; Western Australia’s bank tax could lead to costs being passed down to consumers from banks

China moving towards a cashless society

China is leading the world in mobile payments and it is predicted that this method will soon overtake card payments. Chinese companies Alibaba and tencent are being followed by Baidu and Jingdong in their development of the mobile payment method, with Alibaba’s Alipay now being available within 33 countries and regions. While Chinese companies are ahead on the mobile payment technology, foreign companies such as Google, Facebook, Amazon and Softbook are also making advances in this field.

Read more at: China Daily


Growth of internet credit services

Internet credit services are becoming more popular with young adults between the ages of 18 and 27 according to Ant Financial. Ant Financial is a provider of a consumer credit service called Ant Check Later that allows people to buy now but pay later. Ant Financial vice-president Hu Tao says that “People born in the 1990s constitute 47.3 percent of the platform’s registered users”. One of the main reasons for the growth in internet credit services is the difficulty for young adults to get a credit card because they do not have the minimum wage requirement.

Read more at: China Daily


Authorities support for domestic investment reflected in China’s rich list

China’s annual Hurun rich list shows the effects of recent restrictions on leverage-fuelled companies pursuing foreign acquisitions.  This can be seen from the fall of Wang Jianlin from first place to fifth place, while the head of property group Evergrande, Xu Jiayin, moved up to first position. These changes reflect the support from authorities for entrepreneurs investing in the domestic market as opposed to those who place their money in assets outside of China. In contrast, Xu Jiayin has invested money into China’s football team while Wang Jianlin has invested globally.

Read more at: Financial Times


Western Australia’s bank tax could lead to costs being passed down to consumers from banks

While the Western Australian government deliberates over introducing a bank tax that could earn the state government $800 million over the next four years, ANZ has yet to say if the cost of this tax would be passed down to customers as a consequence. According to ANZ chief executive Shayne Elliott, “Either we have to save that money from somewhere else, [or] customers have to pay more, or our shareholders.” As a result of the bank tax and possible pass on of cost to customers, Westpac and the Commonwealth bank have responded by cutting the credit card interest rate.

Read more at: ABC