【正文】 n adjacent industries scramble for payment licenses to close their own loop, and banks themselves catch up in innovation. SAVING / INVESTMENT FINANCING PAYMENT OTHERS FinTech Ecosystem China vs. US and Japan INCUMBE NTS DISRUPTORS 1 OTHER DISRUPT O R S INCUMBE NTS DISRUPTO RS INCUMBE NTS DISRUPTO RS DIRECT BANK DEBIT TRANSF ER SYSTE M MOBILE PAYMENT SOLUTI O N PAYM E NT SERVIC E PROVID E R WeChat Pay Alipay Wallet 1 Ping An Ewallet 3 JD Pay Baidu Wallet 4 99Bill PERSO N A L LENDING SME LENDING CROWD FUNDING 5 Banks such as : ICBC CCB BOC ABC BoCom Asset mgmt panies such as: ICBC Credit Ant Check Later 1 Loan issued by MYban k, (forme r Ant Micro Loan) Antsdaq 1 Weilidai through WeBank Tenpay Micro Loan (財(cái)付通小貸 ) Tencent Gongyi 2 2 Lufax 1 Ping An Crowdfun din g 2 3 JD Baitiao Jing Baobei 3 (京保貝 ) Jing Xiaodai (京小貸 ) 3 JD Crowd funding (京東眾籌 ) 3 Baidu Umoney Baidu Loan Baidu Baizho ng 4 Kuaiyihua 1 Wanda Loans 4 Banks such as: JP Man Chase BoA Citigroup Wells Fargo Asset mgmt panies such as: Banks such as: MUFG SMFG Mizuho Asset mgmt panies such as: ONLINE SAVING PLATFORM ONLINE 5 ASSET MANAGEMENT ONLINE ONLY BANK Suisse Asset Mgmt E Fund Mgmt China Asset Mgmt Insurance panies such as: China Life Ant Fortun e 1 Yu?e Bao 1 Tianhong Asset Manage m en t Ant Fortun e 1 MYban k Licaitong Licaitong 1 WeBank Lufax JD Wealth Mgmt (京東理財(cái) ) JD Xiaojink u Dongjia Caifu1 (東家財(cái)富 ) Baidu Financial Supermarket Baidu Wealth Mgmt Baixin 1 Bank (百信銀行 ) 99Bill Wealth Mgmt (快錢理財(cái) ) 4 99Bill Wealth Mgmt (快錢理財(cái) ) BlackRock Fidelity Charles Schwab Insurance panies such as: Met Life Nomura Daiwa Nikko AM Insurance panies such as: Daiichi Life Nippon Life CLOUD COMPUTING Ant Financial Cloud Tencent Cloud Ping An Cloud Baidu Financial Cloud 1 Wanda Cloud Company PERSO N A L 6 CREDIT SCORIN G ONLINEONLY INSURANCE COMPANY Personal Credit Rating: Official personal credit record of PBOC Zhima Credit Tencent Credit Burea u 1 Zhong An Online Pamp。 Lucy Li。 Richard Ramsden。 Shin Horie。Future of Finance The Rise of China FinTech Mancy Sun +852 297860 72 Goldman Sachs (Asia) . Payment: The Ecosystem Gateway Fintech panies are reshaping the way Chinese consumers pay, borrow and invest. Innovators from Tencent and Ant Financial to JD and Ping An have muscled in to the financial sector and are offering everything from easier and faster ways to pay with just a swipe of a smartphone to creating attractive online saving products and loans. With consumers? financial needs unmet by traditional banking and the help of cuttingedge technology, vast new profit pools are being created. In the first of our series on The Rise of China FinTech, we focus on unique trends investors need to understand and the emergence of electronic new payment methods that have bee a crucial gateway for innovators? closedloop ecosystems. Piyush Mubayi +852 297816 77 Goldman Sachs (Asia) . Tian Lu, CFA +852 297807 48 Goldman Sachs (Asia) . Stanley Tian +852 297819 45 m Goldman Sachs (Asia) . Goldman Sachs does and seeks to do business with panies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. For Reg AC certification and other important disclosures, see the Disclosure Appendix, or go to registered/qualified as research analysts with FINRA in the . The Goldman Sachs Group, Inc. Future of Finance: The Rise of China FinTech August 7, 2017 Goldman Sachs Global Investment Research 2 Table of contents Portfolio Manager?s Summary 4 Sizing the addressable market: Untapped consumer demand 10 Key shaping trends 1: Integration 12 Key shaping trends 2: Regulation 14 Key shaping trends 3: International 17 Thirdparty payment: The current state of play 22 Key payment channels by type of transaction: B2C, C2C and B2B 28 How does it work? Traditional vs Thirdparty 30 How do they make money? Traditional vs Thirdparty 33 Enablers of growth 36 Late mover advantage in digitization of money 36 Fee structure that is closer to cash vs cards 37 Unique infrastructure setup 39 Proliferation of emerce /social platforms enables viral growth 41 Improving ease of use with technology advancement 44 Understanding the key players and petitive landscape 46 Alipay 49 Tenpay 51 Sizing the addressable market 55 Key debates for future 1: Moization 58 Key debates for future 2: Regulatory 60 Key debates for future 3: Fee petition and Mamp。 Robert D. Boroujerdi。 Hugo ScottGall。 Elsie Cheng, Ronald Keung, CFA。A: We expect fee petition to intensify and expect to see more M