1.46 billion yuan in enforcement targets looming, how to solve the operational difficulties of joint bank payments

Source: Beijing Business Daily

Author: Liu Sihong

The deep adjustment of third-party payments is still ongoing. Recently, Shandong Lianxing Payment Co., Ltd. (hereinafter “Lianxing Payment”) faced judicial risk. The company was listed as a judgment debtor by the Jinan Intermediate People’s Court, with an execution amount of about RMB 246 million, which has also drawn industry attention to the operational stability of this payment institution.

This long-established payment institution, founded in 2005, has registered capital of only RMB 101 million, yet it has had to directly confront the debt pressure of RMB 246 million. As an important payment entity based in Shandong, its stored-value account operation Type I license (the former internet payment business) had once been a scarce resource. Its services covered multiple groups including individuals, enterprises, and government agencies, and its businesses such as online payments, mobile payments, and virtual payments were once thriving. However, this execution amount—far exceeding its registered capital—also indirectly exposes the operational difficulties it is facing.

Execution amount far exceeds registered capital

Lianxing Payment is a long-established payment institution in Shandong with 21 years of operation. A recent filing and execution announcement has made the company’s funding difficulties public.

According to Tianyancha, Lianxing Payment was filed for enforcement on February 28, and the execution court is the Jinan Intermediate People’s Court. The execution amount is about RMB 246 million. Judging from the case hearing procedure, this is the first enforcement. Besides Lianxing Payment, the judgment debtors include Green Land Lianxing Information Technology Co., Ltd. (a wholly-owned subsidiary of Lianxing Payment; hereinafter “Green Land Lianxing”) and Bonny Group Co., Ltd. (one of Green Land Lianxing’s shareholder entities).

It should be noted that Lianxing Payment’s registered capital is RMB 101 million, while the execution amount of RMB 246 million is 2.4 times its registered capital. Industry insiders believe that the appearance of such a large execution amount will create direct pressure on the company’s governance, financing capability, business cooperation, and other aspects.

Regarding the reasons why this happened and how to respond, a reporter from Beijing Business Daily sought verification from Lianxing Payment. As of the time of publication, no reply had been received. However, relevant customer service told a reporter from Beijing Business Daily that the company is still operating normally, and when asked whether an operating crisis had occurred, the other party said they were not aware.

Public information shows that Lianxing Payment was established in March 2005. It is an important licensed payment entity in Shandong. The payment license type is stored-value account operation Type I, that is, the former internet payment business. It mainly provides various services such as online payments, mobile payments, telephone payments, and virtual payments to individuals, enterprises, government agencies, industry websites, and service providers.

Based on the main scenarios covered by Lianxing Payment, they mainly include administrative education, e-commerce, telecom industry, steel industry, logistics industry, as well as aviation and tourism, cross-border payments, and more. Its connected products include guaranteed payments, entrusted settlement, dual-interface payments, quick payments, and so on. From the cooperation institutions disclosed on its official website, most partners are Shandong-based organizations, including Shandong University, Shandong Personnel Examination Network, Jinan Heating Co., Ltd., Haier, and others.

“Lianxing Payment was listed as a judgment debtor in this case, with a case amount as high as RMB 246 million, far exceeding the scale of its registered capital of RMB 101 million. This is no longer a simple business dispute, but a major risk event that touches the survival line.” Shen Xiayi, Deputy Dean of the Research Institute at Lianxing Securities, said directly.

Survival pressure is evident behind the funding problem

Behind the funding issue is the most urgent survival pressure currently faced by Lianxing Payment.

When discussing the reasons for the enforcement, Shen Xiayi believes that, on the one hand, there may be shortcomings in corporate governance, with inadequate internal control mechanisms. On the other hand, there may also be a problem of a single business structure. From a business perspective, it lacks differentiated competitive advantages. Under pressure from leading institutions, profit margins continue to narrow, making it difficult to cover operating costs and potential debts.

“Based on the facts, this event directly points to the company’s debt default and a tight cash flow situation. The underlying causes include limited business scale of regional licensed institutions, a single profit model, insufficient compliance investment, accumulated historical violations, and weak risk-resistance capacity in the context of strict supervision and industry concentration, etc. At the same time, one can also see that the large execution amount is far beyond its registered capital, which reflects that there may be clear loopholes in corporate governance and risk management and control.” Wang Pengbo, Chief Analyst at Botong Consulting, also said.

Wang Pengbo believes that, from Lianxing Payment’s business structure and capital strength, this large execution will directly affect the company’s cash flow arrangements and day-to-day operating stability. It will also create certain pressure on business cooperation, channel expansion, and market confidence. The company is likely to face phased liquidity tightness, and in the future may need to stabilize operations through ways such as shareholder support, debt negotiation, business contraction, etc., while also optimizing its assets-liabilities structure to ensure that its core payment business runs normally.

Industry insiders believe that this large-scale enforcement may have an all-round impact on its operations, especially the issue of liquidity tightness.

Lianxing Payment’s path to break the deadlock must not only address the immediate crisis, but also plan for long-term development. In discussing responses, Du Tongtong, a researcher at Lianxing Securities’ research institute, said that in the short term the company needs to prioritize sorting out its debt structure, negotiate execution plans with creditors and the court, and strive for debt extensions or installment repayments to ease cash flow pressure. In the medium term, it needs to optimize its business structure, divest low-efficiency businesses, focus on regional core scenarios, and enhance profitability. In the long term, it needs to improve internal control and compliance systems, strengthen capital management, proactively meet regulatory requirements, and lay a foundation for license renewals and subsequent development. Meanwhile, it can also seek strategic investors to inject capital and supplement its capital strength.

Need to strategically reduce and rebuild

The crisis of Lianxing Payment is a snapshot of the deep shuffling in the third-party payment industry.

Currently, third-party payment industry supervision is tightening, the value of payment licenses is declining, and the effect of concentration among top players is intensifying. In recent years, multiple small and medium-sized institutions have exited the market either due to equity freezes and debt defaults, or due to survival problems related to compliance. A reporter from Beijing Business Daily found that, since 2025 alone, the People’s Bank of China has announced 13 already deregistered licensed institutions. As of now, the cumulative number of payment licenses “reduced” has reached 109.

Industry insiders believe that, as supervision tightens and concentration effects among top players intensify, more small and medium-sized institutions will face survival choices.

“Many small and medium-sized payment institutions, although they have the conditions to carry out business across the country, often have limited resources and weaker brand influence in actual operations. They tend to rely more on regional resources and local scenarios. Overall, they tend to show characteristics such as not strong capital strength, relatively traditional profit models, insufficient compliance and risk-control investment, and weaker ability to withstand risks.” Wang Pengbo said. In an environment where supervision tightens and industry concentration continues to rise, for these payment institutions to maintain stable operations, they should first adhere to compliance bottom lines and control leverage and liquidity risk. Second, they should focus on vertical and segmented fields, deeply cultivate advantageous scenarios such as industrial payments and local life services, and take a professional and refined route. In addition, they can enhance capital strength and business synergy by introducing strategic shareholders and strengthening cooperation with upstream and downstream institutions, seeking a sustainable transformation path while holding onto their basic foundation.

Du Tongtong also believes that for many regional payment institutions with a single license, to withstand risks and seek transformation, the institutions need to strategically reduce and rebuild. They must return to their core payment business, treating compliance as a survival bottom line rather than a burden of cost. They should also abandon the expansion mindset of being “big and all-encompassing,” and instead deeply cultivate regional markets or vertical segments to form the ability for differentiated competition against leading institutions.

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Responsible editor: Wang Xinru