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4 Chinese Internet Companies Betting On Mobile Banking
As the banking game grows in China, so do the players.
The number of mobile banking users in China topped 150 million in 2012, with major banks seeing more than 100% growth in mobile and online banking users. Chinese regulators are also looking to shake up the country’s slow-moving financial industry by allowing more types of companies to apply for banking licenses, which has Chinese internet companies with massive user bases and deep pockets, looking to get into the banking game.
With lines starting to blur between banking, internet retailers, and social media, here’s four companies that are betting on banking:
1 – WeChat
WeChat, the mobile chat app that had more than 300 million users within two years of being started, is now working on distributing wealth products via smartphones, and offering payment options for fund managers, according to Chinese media.
Launching mid-December, WeChat’s financial product will allow users to store their savings straight from their smartphones via TenPay, Tencent’s very own third-party payment system. Their money will be accessible at any time and there will be no limit to the amount of money they can deposit (unlike Baidu’s product).
WeChat will now double as an e-wallet with a major advantage over it’s competitors – it already has 600 million registered users.
2 – Alibaba
Way back in 2008 Jack Ma, founder and chairman of Alibaba vowed to change the banking industry. Now the internet retailer is offering micro loans, securities investments and payment services. They’ve also cofounded a company that sells insurance policies and settles claims online.
Alibaba employees believe the old way of banking is already dead. “The model where people must deposit their money with a bank and the bank lends to borrowers is based on a “decadent, waning philosophy of traditional finance that has been left behind by the Internet age” Jack Ma said. Many analysts currently believe the only thing separating Alibaba from “real” banks is a license.
3 – Pandai
Founded in July of 2012, Pandai is a Chinese “Peer-to-peer” lending start-up with a model similar to that of popular P2P site Prosper in the west. Pandai seeks to connect borrowers with lenders through a credit risk management system that claims to better understand different customer demographics within China.
Pandai is claiming lenders can earn fixed-income returns as high as 15% by investing as little as 100 RMB, while borrowers are offered the ability to build credit with lower priced loans through a convenient online platform.
4 – Baidu
Baidu, China’s leading search engine, raised more then 1 billion yuan of investment for its new online wealth management product “Baifa” after it was made public in October. Baifa was launched in collaboration with Baidu Finance and China Asset Management, and allows users to make investments as little as 1 RMB with annual interest rates of up to 8 percent.
Baidu claims that Baidu Baifa will use the power of the internet, big data, and advanced data mining tools to understand the financial preferences of it’s user in order to help them receive the greatest returns on their investments with a minimal amount of time and capital.
Many believe that Baidu, much like Alibaba and WeChat is looking to create a whole suite of online banking and financial service platforms in the future.