Electronic payment is a profitable solution for ChinaPnR

SHANGHAI: As companies around the world watch their profits rapidly disappear due to the financial crisis, China Payment and Remittance Service (ChinaPnR) has been reaping a profit margin that would make any CEO jealous.

"Since the third quarter of 2008, we have begun to make a profit, after about two years operation," said Tang Wei, general manger of ChinaPnR's marketing department, at the company's office in one of the most expensive buildings in downtown Xujiahui. "The crisis has actually served as an opportunity for us."

Not just a small profit, the company, which focuses on electronic payment solutions for airlines as well as other businesses, has earned 10 times what it made a year ago. And it is expected that in 2009 will be six times more than 2008.

ChinaPnR was founded in July 2006 by veterans of the country's e-payment industry. It focuses on electronic payment of air tickets and its initial investment reached over 100 million yuan.

"By clicking on the airline company's web site or calling the company's service line and putting in your bank account information according to the instructions, you have completed an electronic payment," Tang said.

So far, the company has signed contracts with 11 major Chinese airline companies including Air China, China Eastern Airline, China Southern, Hainan Airline and Shenzhen Airline, supporting all of them with Internet payment access and four through phone access as well.

"The phone system will instruct you to key in your information, which ensures better security," said Tang.

At the same time, the company has included about 30,000 other small and medium size sales offices into its network.

"While the economy is bad and less people are traveling, our business is growing rapidly," Tang said. "Because a bad economy forces businesses to save money and electronic payments can help them with that."

In June, the Civil Aviation Administration of China announced policies to encourage electronic payment of air tickets. Now about 10 to 20 percent of air tickets are purchased electronically, according to Tang.

ChinaPnR, which services a variety of other businesses including online games and entertainment, Internet education and financial services, began to focus airline e-tickets last year.

"The aviation industry is suffering from the financial turmoil and airline companies are stepping up efforts to increase the percentage of direct sales and maintain a profit," Tang said. "We are able to help them in optimizing business model and speeding up their cash flow with our electronic payment services."

ChinaPnR is leading the country's e-payment industry, according to Tang.

"What make us special is that we tailor make payment solutions for each specific business type and each company," said Tang."In the turmoil, we try to help them maintain a healthy cash flow."

The company designs a specific system for each party involved in the business chain, including airline companies, agents, individual clients and group clients.

"There has not been one single credit card theft or system crash so far," Tang said.

The company also authorizes its clients a certain amount of credit, to ease the cash flow pressure.

"For example, while banks pay us within seven days of transaction, we pay our clients the second day and it happens a lot that we pay millions on behalf of them in advance.

"With it, ticket agents will be able to speed up their cash flow four times at least, which is important in these bad time."

According to the latest figures from iResearch, a prominent Chinese IT research house, China's e-payment market grew rapidly in 2007, with a payment transaction value exceeding 100 billion yuan for the first time. Air tickets accounted for most e-purchases followed by others including online purchases and games, at 31.5 percent.

In 2008, China's e-payment market was expected to reach 210 billion yuan. Although the growth rate is slowing, by 2011 it is predicted that it will reach 1.25 trillion yuan.

"There is still huge space for us to grow," Tang said. "Plus, we are signing more clients and exploring other businesses and we are signing more airlines next year," he said.

The company will also focus on e-payments for insurance industry.

"Even the economy is bad, we have been hiring because of the growth of business," Tang said. "And we hope to take advantage of the bad economy to hire top talents sacked from other companies."

(China Daily 01/19/2009 page6)