The Rising Cost of Going Global: Why Chinese Payment Giants Can't Escape the Price Tag

China’s payment industry is in the midst of a historic contraction. By late 2025, the country’s central bank had revoked 107 payment licenses, shrinking the number of licensed operators to just 163—a 40% decline from the industry’s peak. Yet paradoxically, the survivors are doubling down. Tencent’s payment division increased its registered capital from 15.3 billion to 22.3 billion yuan. Moments later, Douyin Pay and Netbank Online announced capital raises worth hundreds of millions. The message is clear: the domestic market is saturated. Domestic payment processing fees hover between 0.3-0.6%, barely covering operational costs. Cross-border payments, by contrast, command premiums of 1.5-3%—three to five times higher. For any growth-seeking player, the math is inescapable: survival now depends on going global.

But this journey costs far more than most anticipate. Beyond obvious licensing fees lie hidden expenses in compliance infrastructure, talent retention, and geopolitical exposure. The real price tag of international expansion isn’t measured in millions—it’s measured in billions, and often paid in failure.

The Gates Keep Getting Expensive

Entering a new market begins with a single requirement: obtaining a local payment license. This sounds straightforward until you examine the fine print.

In the United States, acquiring a Money Transmitter License (MTL) typically demands 12-18 months of work and waiting. The visible costs are modest—application fees run into the six figures. But beneath the surface lies a far steeper barrier: massive capital reserves that must be held hostage during the approval process. New York requires surety bonds of $1 million. California demands $500,000. Individual states layer on thousands in application fees, with annual maintenance costs sometimes exceeding tens of thousands of dollars.

These requirements act as brutal filters. Small competitors hemorrhage cash during approval periods and simply disappear. But for survivors, these very barriers become moats.

Airwallex exemplifies this dynamic. The fintech accumulated over 80 global payment licenses over a decade of relentless investment. This long slog finally broke through in 2025, when annual recurring revenue (ARR) crossed $1 billion. What’s striking isn’t the achievement itself—it’s the timing. It took nine years to reach $500 million ARR. Then just one year to double to $1 billion.

LianLian Digital walked a similar path, amassing 66 licenses. By mid-2025, the company processed 198.5 billion yuan in total payment volume, up 94% year-over-year.

Well-funded competitors increasingly skip the slow route. Payoneer spent nearly $80 million acquiring EasyPay—not for technology, but for its license. Airwallex followed suit with Shopline Payments. Sunrate absorbed Chuanhua Pay. The logic is identical: buy time by purchasing regulatory approval.

Yet acquisitions merely solve the gate-keeping problem. They don’t address what comes next: the infrastructure these gates protect.

When Talent Becomes Your Biggest Expense

Every payment platform must build fortress-grade compliance systems. And here, the costs transcend traditional operational budgets.

Starting with basics: each new market requires establishing anti-money laundering (AML) and Know Your Customer (KYC) verification systems compliant with local law. In the EU, firms must navigate the General Data Protection Regulation (GDPR) and the Fifth Anti-Money Laundering Directive (5AMLD). The U.S. imposes the Bank Secrecy Act (BSA) and Financial Crimes Enforcement Network (FinCEN) standards. Each system requires dedicated legal, risk management, and engineering teams—easily costing millions.

Worse, compliance is never static. In 2025, the EU introduced the Digital Operational Resilience Act (DORA), mandating tougher cybersecurity protocols and incident reporting. Payment platforms must instantly pivot entire operations around evolving requirements. System overhauls cascade down through compliance teams, engineers, and training departments. Each regulatory shift becomes a company-wide mobilization event.

The pressure isn’t limited to foreign shores. Chinese regulators are simultaneously intensifying “look-back” reviews of offshore operations. In 2025, China’s payment sector faced approximately 75 penalty notices totaling over 200 million yuan in fines. AML violations topped the offense categories.

Beneath these headline penalties lies a deeper reality: the talent crisis sustaining this world.

China produces abundant technical talent at competitive costs. But the compliance ecosystem requires something different—multidisciplinary specialists fluent in multiple jurisdictions’ financial regulations. These professionals are scarce globally. And their scarcity drives compensation into the stratosphere.

At top-tier Chinese firms, entry-level compliance specialists command annual salaries around 1.5 million RMB. Move to Hong Kong’s more mature financial sector, and compensation jumps to 2.5 million HKD. Push further to the United States, and the figure becomes $350,000 USD annually. For every percentage point of additional profit captured overseas, companies pay exponentially higher prices in human capital. The arithmetic becomes brutal: a specialist earning three times a Chinese counterpart’s salary requires processing three times the transaction volume just to break even.

This talent arbitrage explains why many Chinese payment firms remain shackled to domestic operations, despite obvious international opportunities. Building truly global compliance infrastructure doesn’t just require capital—it requires surrendering margins to feed expensive overseas teams.

Learning from Paytm’s $2 Billion Mistake

Some lessons come cheaper than others. Paytm’s fate came at a devastating price.

Ant Group poured approximately 336 billion Indian rupees into the platform, which briefly captured roughly half of India’s digital payments market. Then, in January 2024, India’s central bank issued a sweeping prohibition: Paytm was banned from accepting deposits, conducting credit transactions, and operating its payment infrastructure. The company was essentially hollowed out.

The stated reason was regulatory non-compliance. The real reason was far simpler: India couldn’t tolerate a Chinese-controlled financial system processing its commerce. When a critical infrastructure for a nation’s economy carries visible Chinese ownership, political opposition becomes inevitable—and ultimately unstoppable.

By August 2025, when Ant Group completely withdrew, its documented investment loss reached 157 billion rupees, or roughly $2 billion. Paytm itself saw revenues collapse 32.7% year-over-year.

This wasn’t a business failure—it was a geopolitical defeat. And it revealed an uncomfortable truth: capital alone cannot guarantee market access when national interests are at stake.

Compare this to Japanese conglomerates’ international playbook. When Mitsui or Mitsubishi expand overseas, they don’t simply export products. They deploy integrated financial ecosystems: affiliated banks, trading companies, and lending consortia that control the entire capital chain from manufacturing through retail distribution. Japanese cars sold in Southeast Asia come backed by dealer inventory financing and consumer loan options administered by related financial institutions. This architecture gives them control at every financial node.

Chinese automakers, by contrast, expand like barefoot runners. Despite exporting 6.4 million vehicles in 2024, their financial backbone remains underdeveloped. They commonly face inflated financing costs and delayed receivables collections. In challenging markets like Russia or Iran, lacking comprehensive financial infrastructure means instant vulnerability to currency swings and settlement sanctions. Even with Sinosure providing export credit insurance for $17.5 billion worth of vehicles in 2024, this protective layer proves insufficient for the scale of ambitions ahead.

The deeper lesson: without a globally competent financial services architecture, no amount of product excellence insulates you from systemic risk.

The China +1 Playbook

Given these mounting pressures, Chinese payment firms are rapidly adopting a survival strategy: don’t put all eggs in any single basket.

The strategy is called “China +1”—maintain core operations domestically while dispersing critical processing routes, clearing systems, and settlement channels across lower-risk jurisdictions. This explains why the Middle East became a capital magnet through 2025. The UAE offers a relatively welcoming political environment and e-commerce opportunities exceeding $50 billion annually. As of 2025, over 6,190 Chinese enterprises were active in Dubai, collectively seeking offshore settlement solutions capable of bypassing traditional SWIFT system constraints.

Yet “safe harbors” are raising their drawbridges daily. Vietnam, seeking to avoid tariff entanglements, is aggressively cracking down on “origin laundering”—firms that shift operations merely to rebrand exports. These stricter policies are forcing payment and logistics providers to rapidly relocate. Indonesia is becoming the new magnet, offering greater policy flexibility compared to increasingly scrutinized alternatives.

According to McKinsey’s 2025 analysis, the global payment landscape is fragmenting into increasingly isolated jurisdictions. For modern platforms, product excellence no longer suffices. Survival now requires learning to navigate narrow political corridors—exploiting whatever openings exist in geopolitical gridlock while remaining perpetually ready to relocate again.

Building Without Shortcuts

The most counterintuitive lesson from this marathon: the fastest path forward is often the slowest and most expensive.

Years of chasing technology-driven disruption taught Chinese firms to prioritize speed. But overseas payment expansion rewards the opposite virtue: patience. Every compliance system built brick-by-brick, every regulatory guideline mastered, every expensive compliance officer hired—these accumulate into durable credit assets within foreign financial systems.

Only when sufficient trust-capital has been accumulated can Chinese enterprises transition from operating as temporary vendors outside others’ financial doors to genuinely controlling their own settlement infrastructure.

For China’s payment giants, going global has transitioned from opportunity to necessity. Yet there are no shortcuts on this particular journey. The safest path remains the most capital-intensive and time-consuming one. Success ultimately belongs to companies patient enough to build genuine infrastructure rather than chase arbitrage opportunities. Those who can sustain this discipline—absorbing years of negative unit economics, maintaining expensive overseas compliance teams, and navigating geopolitical minefields—will eventually achieve what superficial expansion never could: durable competitive moats in the world’s payment systems.