Alipay, originally a payment channel for the Alibaba e-commerce platform, and WeChat pay, growing out of a popular Chinese social messaging service, have emerged as giant providers of e-wallets in China. Their offering today has outgrown their initial scope and includes a wide variety of financial services – including money market investing, insurance services, personal credit lines and online banking.
Moreover, coupled with the rise of purchasing power of Chinese outbound tourists, such e-wallet providers are increasingly internationalising their offerings and aiming to increase their acceptance as a payment method abroad. Luxembourg is emerging as a European hub for such internationalisation, with Chinese e-payment companies setting up a licensed entity in the Grand Duchy to passport their services across the European Union. As an example, in December 2018, Alipay obtained an e-money license in Luxembourg.
Innovation in payments is also helping to change the ways across border payments flows work between merchants and e-commerce platforms. Specialist service providers in this field operating out of Luxembourg connect merchants from around the world with the customers of e-commerce platforms, while allowing them to receive their payments in their home currency in a seamless fashion.
Here, along with the provision of a payment channel, new technology allows for the provision of additional value-added services – such as consumer trend analytics, performance data and cross-border regulatory compliance.
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CONNECTING CHINA AND EUROPE
Seven major Chinese banks, including Bank of China, Industrial and Commercial Bank of China, China Construction Bank, Agricultural Bank of China, Bank of Communications, China Merchants Bank, China Everbright Bank have chosen Luxembourg as their principal European domicile.
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INVESTMENT FUNDS
Luxembourg is the global hub for cross-border investments and a gateway for Chinese investment flows
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RMB DENOMINATED BONDS
As a result of the internationalisation of RMB, the Dim Sum Bond market has grown since its inception and the Luxembourg Stock Exchange (LuxSE) is a one of the leading exchanges for the listing and trading of these instruments
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CLEARING AND SETTLEMENT
Since 2013, the PBoC began to designate overseas subsidiaries of Chinese banks to act as offshore RMB clearing banks. In Luxembourg, ICBC Luxembourg Branch functions as the official RMB clearing bank.
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PAYMENTS
Alipay, originally a payment channel for the Alibaba e-commerce platform, and WeChat pay, growing out of a popular Chinese social messaging service, have emerged as giant providers of e-wallets in China.
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