As e-commerce takes off in the country, China's third-party payment companies are basking in the glow of a significant market boom.

In the first half of this year, the transaction value of the third-party payment industry amounted to 830 billion yuan ($128.7 billion), skyrocketing 112 percent from a year ago, said a recent report of the China e-Business Research Center.

Alipay dominated the sector, with a market share of 47.2 percent in the first six months, followed by 20.3 percent held by Tenpay and 9 percent by Chinapay. The report also expected the transaction value to maintain rapid growth to reach 2.25 trillion yuan ($348.8 billion) in 2012.

It is estimated that China now has around 300 third-party payment service providers, but some unscrupulous firms are believed to be involved in illegal activities, such as money laundering and credit fraud.

Policymakers have spared no effort to streamline the thriving but highly fragmented industry. The People's Bank of China, the central bank, on May 26, issued the first batch of licenses to 27 qualified third-party payment service providers. Those that failed to receive a license before the deadline of September 1 may have to withdraw from the market.

Despite the consolidation efforts, competition will remain fierce, and companies will try to specialize in different fields to lure customers, said Zhang Meng, a researcher with the consulting firm Analysys International.

The Beijing-headquartered Yeepay, for instance, has gained a leading position in the education sector while Tenpay focuses on the airline ticketing businesses.