Citing a reporter from China Economic Net? Li Hui? Beijing report
As China’s digital entertainment industry expands overseas from “bringing products to overseas markets” to “long-term operations for global players,” payments are also shifting from a back-end transaction tool to an important variable determining merchants’ profit-and-loss statements.
According to a report on the January–June 2026 China game industry released by the China Audio-Video and Digital Publishing Association, in the first half of this year, the overseas market’s actual sales revenue for China’s domestically developed games reached $12.372 billion (about RMB 83.56 billion), up 30.22% year on year, marking the largest increase in nearly six years.
Beyond games, digital entertainment services such as short dramas and live streaming, as well as emerging AI agent applications, are taking an increasing share in cross-border transactions—prompting cross-border payment institutions to “follow suit.” A 2025 PayPal Global Beat report shows that games and digital goods have become one of the top five热门 categories worldwide that global consumers purchase Chinese products for via PayPal. Official data indicates that in the first half of 2026, transaction volume from China’s digital entertainment merchants processed by Antom, an Ant Group subsidiary, increased by 80% year on year.
“As Google Play’s new payment policy takes effect on the last day of June, the platform service fee drops from 30% to a minimum of 10%. This further releases the motivation for game developers to build their own independent-stores direct checkout channels, bringing new opportunities to cross-border payments firms.” Huang Xiaoming, Airwallex’s Chief Commercial Officer for China, disclosed this in an interview with reporters from (China Business News).
To share in the overseas growth dividend
“This time, more than 50 cross-border payments companies have come to the show—from international giants to small institutions whose names you can’t even remember. All of them are looking for opportunities in this space.” A payments professional who took part in the ChinaJoy China International Digital Interactive Entertainment Exhibition not long ago remarked to a reporter.
Based on market research, the first half’s three biggest hotspots in the digital entertainment sector were overseas short dramas, overseas games, and live streaming.
“Overseas game publishing is still the subcategory with the largest funds volume. It is facing two new platform payment policy changes. The rise of AI short dramas releases content production capacity, and platforms’ demand for flexible billing and mixed-charging models is increasing rapidly. As for live streaming, the global market size for tipping and gifting remains enormous—payment penetration rates are extremely high in the Middle East and Southeast Asia, and the Latin America market is growing quickly as well.” Huang Xiaoming told reporters.
Taking overseas game publishing as an example, the industry faces multiple challenges: the decline of traffic dividends, rising customer-acquisition (buying ads) costs, and continued erosion of profits by channel take-rates and losses associated with cross-border payments. For a long time, around 30% of platform revenue share (colloquially the “Apple tax” and “Google tax”) has continued to squeeze developers’ profit margins.
Huang Xiaoming gave the reporter an example: in an SLG strategy game with monthly流水 (monthly revenue run-rate) of USD 5 million, the “Apple tax” would take away USD 18 million in revenue every year. If the game switches to direct checkout on the official website, the profit margin can increase directly by more than 25%.
At the same time, opening third-party payment methods on the platform—while reducing costs for issuers—also raises the barrier for building an in-house third-party payment system. During the process of redirecting to an external webpage or application to complete payment, every redirect means a risk of user drop-off. “Games are fun, and they try to talk you out of recharging”—this is a genuine complaint from many overseas players.
PhotonPay (2026 Global Game Business White Paper) (hereinafter the (white paper)) shows: According to Newzoo data, 47% of users will give up on a purchase because of payment failure, payment method limitations, or the lack of a preferred payment tool; 44% of users stop payments because of hidden fees, automatic renewals, or a final price that is not transparent.
“Whether the payment method is familiar, whether the process is smooth, and whether the system can reliably complete transactions during peak periods will directly affect players’ experience and payment conversion.” Liu Zheng, CEO of Antom, Ant International, said.
The reporter noted that as localization for collections, AI real-time risk control, and embedded finance have become urgent necessities for overseas expansion, multiple cross-border payments firms have introduced tailored solutions in the digital entertainment space this year.
In March 2026, PingPong launched for North American game developers an all-in-one global digital entertainment acquiring solution covering more than 90% of local US players. Its core idea is “no redirects”—by using an embedded cashier interface within game scenarios and underlying API technology, it directly launches the cashier inside the game. In June, Airwallex launched Airi, a one-click checkout product for the entire ecosystem. It focuses on allowing users to bind payment information once, and then complete payment with one click on all platforms integrated with Airi…
Meanwhile, Ant International, on the one hand, focuses on cross-border merchant acquiring via Antom, helping game developers connect global local payment methods. On the other hand, it focuses on B2B trade receivables collection and FX settlement via WorldFirst, covering the ecosystem from C-end in-game purchases to B-end game development and advertising agency service providers. Data disclosed by Ant International shows that to date, the company’s global account services have been adopted by more than half of China’s large and mid-sized game developers, as well as by many AI application companies, short drama platforms, and small-to-medium game development studios.
From cost items to “growth enablers”
For a long time, many developers lacked clear accounting for items such as specific channel deductions and chargeback/refund rates. As a result, payments tend to show “passive benefits with high costs,” and are often seen more as a back-end tool rather than part of operational capability.
The above (white paper) shows that since 2023, as hybrid gameplay, cross-platform publishing, and mixed monetization have become more common, the gaming industry has entered a phase of refined operations. Payments have since stopped being only a transaction conduit and began to deeply influence users’ conversion rates. Direct checkout on official sites, payment middle platforms, localized payments, and global funds management capabilities have gradually become key foundational infrastructure for leading vendors.
This also drives the payments industry’s “cost items” to move toward growth leverage.
Reporters learned from industry sources that, judging from the revenue composition of cross-border payments providers, the mainstream cross-border payment platforms’ FX settlement fee rates are typically 0.3%–1% (not considering subsidies). Some platforms use tiered pricing (for example, monthly revenue runs under USD 1 million are capped at 0.7%, with lower rates for higher volumes). For acquiring fee rates, some payment providers charge a certain percentage based on the transaction amount (such as 2.9%–3.4%), or a fixed fee per transaction (such as USD 0.3–0.5 per transaction). Depending on risk, scenarios, and volume, fee rates may also have some flexibility.
But this is not the only source of income that cross-border payments firms pursue. Industry consensus is that the comprehensive profit margin in the digital entertainment (games/short dramas/streaming) sector is better than that of traditional cross-border physical e-commerce, mainly due to differences in service depth and product embeddedness.
Huang Xiaoming told reporters that the payment demand of traditional physical e-commerce is relatively singular: merchants mainly need to collect payments and perform FX settlement, and payment providers’ services mostly remain at the collection and disbursement stage. “But in the digital entertainment sector, the funds flows are longer and more complex. From the front end—global acquiring, billing management, optimization of dynamic 3DS (3-Domain Secure, ‘three-domain payment security protocol’), and risk-control customization—to the back end—multi-currency collections, batch payouts, multi-currency FX exchange, global card issuing—then to financial automation and compliance management, every link has clear room for a service premium.”
“The revenue types the company hopes to increase are mainly service revenues at the software layer, rather than pure pass-through fee revenues. Currently, we are stepping up revenue expansion for value-added services such as billing management products, AI-native financial platforms, and card issuing-related businesses. A shared characteristic of these revenues is that their profit margins are higher than those of pure pass-through fee revenues, and they also create stronger customer stickiness.” he said.
But when mining in the highly profitable digital entertainment industry, the challenges are also far from small. Common issues in the digital entertainment industry include low-value, high-frequency transactions; account sharing; card-not-present fraud/scribbing (unauthorized card charges); “wool” (coupon/bonus abuse) parties; abnormal top-ups; and misuse of chargebacks and refunds. A professional from a well-established cross-border payments provider told reporters that in the first half of this year, the company’s digital entertainment transaction volume declined: “because we conducted a compliance risk-control exercise, and cleaned up some merchants that did not meet risk requirements.”
If risk control is too strict, it will incorrectly block real users; if it is too loose, it will lead to chargeback losses. Taking 3DS as an example: if verification is done for every transaction, in impulsive consumption scenarios such as unlocking short dramas or topping up in games, forced 3DS verification will directly interrupt users’ emotions, leading to a large number of abandoned orders. For this reason, payment providers are trying to find the best balance between “high approval rates” and “low fraud rates.”
Liu Zheng revealed that Ant International’s Antom Shield intelligent risk-control system currently enables 100% real-time risk scans and millisecond-level decision returns for every transaction. “The system can dynamically adjust risk-control strategies based on user and transaction characteristics. While it identifies abnormal transactions, it also reduces mis-blocking of normal users.”
“From a solutions-logic perspective, we embed an AI payment optimization engine into the entire payment stack, performing real-time risk assessment by combining data such as device fingerprinting, behavioral patterns, IP geographic location, and historical transactions—identifying low-risk and high-risk transactions and taking different triggering methods accordingly. Meanwhile, merchants can also configure their own risk preferences—for example, in which scenarios they prioritize conversion and in which scenarios they prioritize risk control.” Huang Xiaoming said.
Relevant data show that embedding payment capabilities into the operating workflow and placing risk control up front is accelerating growth and conversion in the digital entertainment industry.
PingPong disclosed that adopting an embedded cashier checkout can help vendors reduce user loss by 10%–15%. Data from a certain leading game developer shows that with personalized scenario customization, the overall payment success rate increased by 5.3%, and the core markets improved by 5%–10%. Airwallex’s data also show that after merchants connect Airi, checkout speed increases by 3x and conversion rate increases by up to 14%. After a leading game developer implemented tailored risk control, the success rate of chargeback appeals rose from 0 to 78%.
According to data disclosed by PayPal, 74% of PayPal users are more likely to shop on unfamiliar websites that offer PayPal as a payment method. Using a PayPal wallet can bring a 46% increase in checkout conversion rate.
(Editor: Li Hui; Review: He Shasha; Proofread: Yan Yuxia)