Innovation is the most important form of financial reform, Huang said. China is actively touting "reform," but it should encourage innovations instead of just paying lip services, he said.

The People's bank of China, the central bank, called a halt to the virtual credit card and QR code payments earlier this year.

PBOC suspends use of virtual credit cards

Alipay gets regulator nod for Tianhong deal

Meanwhile, some Chinese banks are reluctant to cooperate with Alipay, as its popular online fund, Yu'ebao, attracted more than 400 billion yuan in just eight months since its launch on June 13 last year.

"Some people said that Yu'ebao was not an innovative product, but just a mixture of functions. But look at Apple Inc's iPhone. It's also a composition of functions," Huang said. "It's no easy job to build a subversive innovation from scratch, so we should encourage micro-innovation or a combination of innovations."

Yu'ebao now has more than 100 million users, according to China Securities Journal. But its seven-day annualized returns fell to 4.71 percent as of June 12, far below its climax of 6.76 percent on Jan 2 this year.

Analysts attribute the decline to dwindling interbank lending rates, as well as the mushrooming of online wealth management products offered by other tech giants.

"Internet financing is thriving despite controversies. No matter whether you are optimistic about it or not, it will grow vibrantly and robustly," Huang said.

"You will never be the champion if you are sitting on a spectator's seat," said Huang.