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

Ask AI · The reshuffling in the payment industry accelerates, is the plight of Lianhang Payment a reflection of small and medium-sized institutions?

The deep adjustment of third-party payment is still ongoing. Recently, Shandong Lianhang Payment Co., Ltd. (hereinafter referred to as “Lianhang Payment”) has encountered judicial risks, as the company has been listed as a defendant by the Jinan Intermediate People’s Court, with an enforcement target of approximately 246 million yuan, which has raised concerns in the industry regarding the operational stability of this payment institution.

This long-established payment institution, founded in 2005, has a registered capital of only 101 million yuan, yet it must confront a debt pressure of 246 million yuan. As an important payment entity in Shandong, its Class I license for stored value account operations (formerly internet payment business) was once a scarce resource, serving individuals, enterprises, government agencies, and other groups, with online payment, mobile payment, and virtual payment businesses thriving at one point. However, now, this enforcement target that far exceeds its registered capital also indirectly exposes the operational difficulties it faces.

Enforcement target far exceeds registered capital

Lianhang Payment is a well-established payment institution in Shandong with a history of 21 years, and a recent enforcement notice has made the financial difficulties of this payment company public.

According to Tianyancha, Lianhang Payment was subject to enforcement on February 28, with the enforcing court being the Jinan Intermediate People’s Court, and the amount in question being approximately 246 million yuan. From the case handling process, this is the first enforcement action, and among the defendants is not only Lianhang Payment but also Greenland Lianhang Information Technology Co., Ltd. (the wholly-owned shareholder of Lianhang Payment, hereinafter referred to as “Greenland Lianhang”) and Bonnie Group Co., Ltd. (one of the shareholders of Greenland Lianhang).

It is important to note that Lianhang Payment has a registered capital of 101 million yuan, and the enforcement target of 246 million yuan is equivalent to 2.4 times its registered capital. Industry insiders believe that this large enforcement target will directly pressure the company’s governance, financing capacity, and business cooperation.

Regarding the reasons behind this situation and how to respond, a reporter from Beijing Business Today sought verification from Lianhang Payment, but had not received a reply by the time of publication. However, relevant customer service informed the reporter that the company is still operating normally, and when asked whether there is an operational crisis, they stated they were unaware of such matters.

Public information shows that Lianhang Payment was established in March 2005, and it is an important licensed payment entity in the Shandong region. The type of payment license is Class I for stored value account operations, which is the former internet payment business, primarily providing various services such as online payment, mobile payment, telephone payment, and virtual payment to individuals, enterprises, government agencies, industry websites, and service providers.

From the main scenarios covered by Lianhang Payment’s business, they mainly include administrative education, e-commerce, telecommunications, steel industry, logistics, as well as aviation tourism and cross-border payments. The accessed products include guarantee payments, entrusted settlements, dual-interface payments, and quick payments. From the disclosed partner institutions on their official website, most partners are local institutions in Shandong, including Shandong University, Shandong Human Resources Examination Network, Jinan Heating Company, Haier, and others.

“Lianhang Payment being listed as a defendant with an involved amount of up to 246 million yuan, far exceeding its registered capital of 101 million yuan, is not a simple commercial dispute, but a significant risk event that touches on the survival line,” said Shen Xiayi, deputy director of Lianchu Securities Research Institute.

Survival pressure emerges behind funding issues

Behind the funding problem lies Lianhang Payment’s most urgent survival pressure.

Regarding the reasons for this enforcement, Shen Xiayi believes that, on one hand, there may be shortcomings in corporate governance and incomplete internal control mechanisms; on the other hand, there is also the issue of a single business structure, lacking differentiated competitive advantages, and under pressure from leading institutions, the profit margins have continuously narrowed, making it difficult to cover operational costs and potential debts.

“From the facts, this incident directly points to the company’s debt default and tight funding chain issues. The main reasons include limited business scale of regional licensed institutions, a single profit model, insufficient compliance investment, accumulated historical violations, and a weak ability to resist risks in the context of strict regulation and industry consolidation. It is also noteworthy that the large enforcement target far exceeds its registered capital, reflecting potential significant gaps in corporate governance and risk control,” said Wang Pengbo, chief analyst at Botong Consulting.

Wang Pengbo believes that, from Lianhang Payment’s business structure and capital strength, this large enforcement will directly affect the company’s cash flow arrangements and daily operational stability, placing certain pressures on business cooperation, channel expansion, and market confidence. The company is likely facing temporary liquidity tightness and may need to stabilize operations through shareholder support, debt negotiations, and business contraction while optimizing the asset-liability structure to ensure the normal operation of core payment business.

Industry insiders believe that this large enforcement may have an all-around impact on its operations, particularly emphasizing the issue of liquidity tightness.

Lianhang Payment’s path to breaking the deadlock requires addressing immediate concerns while also planning for long-term development. Regarding responses, Du Tongtong, a researcher at Lianchu Securities Research Institute, suggests that the company should prioritize streamlining its debt structure in the short term, negotiating execution plans with creditors and courts to seek debt extensions or installment repayments to alleviate cash flow pressure; in the medium term, it should optimize the business structure, divesting inefficient operations, focusing on core regional scenarios, and enhancing profitability; and in the long term, it needs to improve internal control and compliance systems, strengthen fund management, proactively meet regulatory requirements, lay a foundation for license renewal and future development, and seek strategic investors to inject funds and bolster capital strength.

Strategically reducing and restructuring is necessary

The crisis facing Lianhang Payment is a microcosm of the deep reshuffling of the third-party payment industry.

Currently, the third-party payment industry is facing stricter regulation, a decline in license value, and an intensifying concentration of leading players. In recent years, many small and medium-sized institutions have exited the market either due to equity freezes, debt defaults, or compliance survival issues. A reporter from Beijing Business Today has found that since 2025, the People’s Bank of China has announced that 13 licensed institutions have been revoked, and the total number of “diminished” payment licenses has reached 109.

Industry insiders believe that, as regulation tightens and the concentration of leading players increases, more small and medium-sized institutions will face survival choices in the future.

“Many small and medium-sized payment institutions, although capable of conducting business nationwide, often operate with limited resources and weak brand influence, relying more on regional resources and local scenarios. Overall, they exhibit characteristics of weak capital strength, traditional profit models, insufficient compliance and risk control investments, and weak risk resistance,” Wang Pengbo believes. In the context of tightening regulation and rising industry concentration, these kinds of payment institutions must first adhere to compliance bottom lines, control leverage and liquidity risks; secondly, they should focus on vertical segments, deeply cultivate industry payments and local life services, and pursue a professional and refined approach; additionally, they could enhance capital strength and business synergy through the introduction of strategic shareholders and strengthening cooperation with upstream and downstream institutions, seeking sustainable transformation paths while securing their basic operations.

Du Tongtong also believes that for many regional and single-license payment institutions, to withstand risks and seek transformation, they need to strategically reduce and restructure. They must return to the core payment business, treating compliance as a survival baseline rather than a cost burden. They should also abandon the “large and comprehensive” expansion mindset in favor of deeply cultivating regional markets or vertical segments, developing capabilities for differentiated competition with leading institutions.

Beijing Business Today reporter Liu Sihong