On the evening of December 31st, Shenzhen’s major official platforms officially announced the launch of the "Futian Gifted DCEP Red Packet New Year Promotion Campaign.” This is the second round of distributions of DCEP red packets in Shenzhen after 10 million digital yuan (US$1.5 million) was distributed in similar fashion in October. The total value of red packets distributed in this round amounts to RMB 20 million (US$3 million), with each packet valued at RMB 200.
On December 30th, according to documents disclosed by the Shanghai Securities Regulatory Bureau, Shouqianba (收钱吧) plans to list on the ChiNext market, the NASDAQ-style subsidiary of the Shenzhen Stock Exchange. Established in 2013 and headquartered in Shanghai, Shouqianba is an integrated payment service provider. It provides merchants with multiple payment options, such as card payments and payments by third-party payment apps. With branches in 40 cities across the country, the company also helps with marketing management, finance, advertising, supply chain, and solutions to opening offline stores.
Bloomberg has reported that Ant Group is planning to run its financial business under a new financial holding company, which may be subject to similar supervision as banks. According to people familiar with the matter, Ant is planning to put all its entities that require financial licenses into the new business body. These include their wealth management, consumer loans, insurance, payment and online banking divisions. However, the plan is still under discussion and may change.
On December 26th, 2020, the PBOC, the China Banking Regulatory Commission, the China Securities Regulatory Commission, the Foreign Exchange Bureau and other financial management departments jointly met the Ant Group.
The departments put forward rectification requirements for Ant Group in key business areas. Requirements include 1. enhancing transaction transparency and prohibiting unfair competition. 2. Protecting privacy and processing individual credit services within the legal framework, 3. Establishing financial holding companies, 4. improving compliance in lending/insurance/wealth management, and 5. conducting securities business in accordance with the law.
On December 23rd, Fusion Bank, the eighth virtual bank in Hong Kong, announced its official opening and is the first virtual bank that connects to WeChatPay HK.
Fusion Bank is a joint venture formed by Tencent, the Hong Kong Stock Exchange, ICBC (Asia), Hillhouse Capital and Zheng Zhigang. The bank started its trial business at the end of September. It currently provides savings, fixed deposits, local transfers and foreign exchange trading services in HKD, RMB and USD. It is the first virtual bank to launch foreign exchange trading. Customers can also make local payments in HKD and RMB via FPS QR codes on the bank App.
The new product Dragon HKPay QR Code Payment, launched by CCB Asia, provides QR Code payment services through HK’s Faster Payment System (“FPS”) and UnionPay. With the new service, customers can register their CCB UnionPay credit card and then make QR code payments globally as well as take advantage of UnionPay offers and discounts.
The service is supported by the expansion of UnionPay QR code service. Currently, UnionPay cards are accepted in 179 countries and regions around the world, among which 61 countries and regions have opened UnionPay mobile payment services. About 90 UnionPay-standard digital wallets have been launched in 14 countries and regions overseas.
In November this year, ZhongAn Online Property Insurance Co., Ltd. and China Construction Bank launched a cooperation to use China’s DCEP for online insurance issuance.
ZhongAn was China’s first Internet insurance company and, as of October 31, 2020, cumulative premiums exceeded RMB 50 billion (USD 23 billion), ranking ZhongAn the first among all internet insurance companies.
Huabei is a credit ‘buy now, pay later’ (BNPL) tool launched by the Ant Group which is widely used by younger consumers who may not have a credit card. Huabei can be used on Taobao, Tmall, and in other usage scenarios where Ant has setup cooperation such as parking, travel, hospitals, restaurants, supermarkets, etc.
On November 2, the China Banking and Insurance Regulatory Commission and the Central Bank publicly solicited opinions on the new measures for Internet Small Loan Business, to further control risks and problems in this sector.
Shortly after, some people complained online that their Huabei credit limit has been reduced. Ant Group responded on December 23 that Huabei is currently adjusting the credit of some young users to promote more rational consumption.
Huifu ((01806.HK) and the offeror, Purity Investment Limited, jointly announced that on December 22nd, 2020, the offeror requested the board to submit a proposal to delist the company from the HK Exchange. The amount of cash required to implement the proposal is approximately HKD1,251.5 million (USD161 million). After the proposal is completed, the company will become a wholly-owned subsidiary of the offeror and will withdraw its listing status.
Huifu was established in 2006. It in 2011 was awarded a payment business license from the PBOC. In June 2018, Huifu was listed on the Hong Kong Stock Exchange, and was the first mainland listed 3rd party payment provider. On December 24th, its closing price was HKD3.38, less than half of its IPO price of HKD7.50.
The National Financial Technology Evaluation Center was approved by the PBOC on December 13th and announced establishment in Shenzhen. It is an authorized testing organization in the financial industry and will undertake important technical research for bank card networking, chip migration, and financial technology innovation.
Piaodao Credit’s (朴道征信) license application was accepted by the PBOC in early December. This could potentially be the 2nd individual credit license in China after Baihang Credit in March 2018.
In August 2015, the PBOC announced 8 trial individual credit companies would be allowed to conduct such business, but as the 8 were not willing to share data and form a united credit system, none of them acquired the license in the end. On the contrary, the PBOC authorized a separate company Baihang Credit with the 1st individual credit license.
This time with Piaodao, a state-owned institution Beijing Financial Holding Group is the biggest shareholder. JD Digits, Xiaomi and facial recognition technology vendor Megvii who can provide consumption use-cases, data analysis and technology are main shareholders too.
The announcement No.18 issued by the PBOC stressed that non-bank payment institutions should give full consideration to the usage of both non-cash and cash payments. No party shall reject cash or take discriminatory measures to exclude cash payments. Public promotion of the concept of cashless payment is forbidden and financial institutions and public service should set up manual cash payment channels.
In China, about 13% of residents still rely on cash payment including the elderly and non-smartphone users. Cashless payment is convenient for many people but should not bring barriers to the group that use cash.
According to Macau media, the Macau Monetary Authority is working with the PBOC to follow up the central bank’s digital currency research and development. The MMA will study the future feasibility of using digital currencies in Macau. It has also planned to revise the region’s currency issuance system and add additional legal non-physical payment options.
Bloomberg recently reported that the DCEP was considered to be used in in casinos. But the Macau Gaming Inspection and Coordination Bureau has denied this.
Initiated and established by the China Foreign Exchange Trade Center, Zhonghui Fintech (中汇金科) will provide technology and innovation support to the exchange center in the Guangdong-Hong Kong-Macao Greater Bay Area.
The central bank has already set up 4 fintech subsidiaries in Beijing, Shenzhen and Suzhou. The 4 companies cover fintech related technology innovation, DCEP system development, data analysis and storage, system architecture and maintenance.