On September 30th, the China Banking and Insurance Regulatory Commission officially approved operating licenses for Weipin Fubon Consumer Finance Company (唯品富邦消费金融) and Suyin Kgi Consumer Finance Company (苏银凯基消费金融), respectively. Both companies are jointly invested in by Taiwanese-capitalized banks, including Fubon Bank (富邦华一银行) and KGI Bank (凯基银行). To date, thirty-three companies have obtained consumer finance licenses, with the pace of issuance accelerating significantly.
During the Chinese National Day Holiday (period of October 1st to 8th), the NetsUnion Platform (网联平台) processed a total of 13.39 billion cross-institute online payment transactions with a total amount of 7.23 trillion yuan. The highest transaction volume occurred on October 1, with 1.847 billion transactions processed in a single day. Compared with the National Day holiday last year, the average daily transaction number and average daily transaction value of the network platform increased by 42% and 47% respectively.
On October 9th, Swift launched a pilot “Small Cross-border Remittance” program to provide cross-border remittance services for small and medium-sized enterprises and individual users. Fourteen banking institutions from around the world have so far participated in the project, including Bank of China and Ant Group backed MYBank. Remittance procedures under the program have been designed to be more convenient, and remittance fees will be greatly reduced. In addition, the cross-border remittance networks will be more efficient, with payments received in seconds.
In a push to increase the usage rate of facial payment devices and incentivize merchants to encourage clients to pay with facial recognition, on September 28th, Alipay updated its IoT cooperation rules and subsidy policy. Alipay is currently subsidizing up to 1600 and 2000 yuan on its facial payment devices depending on the type of device. Meanwhile Alipay will also double the subsidies it offers merchants for face scan payments. In related news, WeChat Pay also announced that it had optimized its algorithm to enhance its face scan payment experience.
The PBoC’s Digital Currency Research Institute signed a strategic cooperation agreement with City Commercial Banks Clearing Co. Ltd (城银清算服务有限责任公司) on September 28th. The two parties have agreed to cooperate on digital currency application projects. As one of the main financial infrastructure providers in the payment and clearing field, City Commercial Banks Clearing provides small and medium-sized financial institutions with one-point access services. The next step will see City Commercial Banks Clearing offering commercial and private banks a one-point access service to the digital currency interconnection platform
On September 30th, the Shanghai Stock Exchange announced that the IPO review status of JD Digits had been updated to "inquired." According to JD Digits’ prospectus filed with the Shanghai Stock Exchange on Sept. 11, the company plans to raise 20 billion yuan (US$2.9 billion) via its IPO on Shanghai's Star Market. Guotai Junan Securities will be the lead underwriter for the deal. JD Digits will issue up to 538 million shares on the year-old Nasdaq-style board, or at least 10 percent of its total equity after the issuance.
Chinese wealth management giant, Lufax has filed to go public on the New York Stock Exchange. Lufax, backed by financial giant Ping An Insurance Group, aims to raise about US$3 billion in its initial public offering (IPO), which could take place as soon as the end of October. However, the size of the offering has yet to be disclosed and will be subject to Lufax’s valuation. Goldman Sachs, BofA Securities, UBS, HSBC and China PA Securities are the lead underwriters on the deal. Lufax was valued at US$39.4 billion in a funding round in early 2019.
On September 28th, The PBoC’s Digital Currency Institute signed a strategic cooperation agreement with the Shanghai Government to establish a fintech company. According to the agreement, the two parties will take advantage of technology, talent, and services to gradually realize the implementation of a trade finance blockchain platform. The PBoC’s Digital Currency Research Institute has already set up fintech subsidiaries in Shenzhen, Suzhou, and Nanjing.
The PBoC has announced that it intends to set up a special statistical system for internet-based, commercial bank joint loans to reduce systemic risks. Ant Group’s Huabei, JD Digits’ Baitiao and WeBank’s Weilidai all provide internet-based joint loans, whose market size is estimated at over two trillion yuan. In the next stage, commercial banks will stiffen their prudential management to avert excessive personal debt and strengthen their business management standards for specific groups such as students. In addition, qualifying internet companies will be supervised by financial holding companies.
Ant Bank, the virtual banking arm of Ant Group in Hong Kong, officially launched on September 28th, marking a milestone for the group’s expansion in the territory. A partnership between Ant Bank and AlipayHK will enable the latter’s two million e-wallet users to easily open an Ant Bank account – the first time a virtual bank has connected to existing e-wallet accounts. Ant Bank is offering a 2.5% interest rate for deposits of up to HKD20,000 while traditional lenders offer almost no interest on saving accounts. The virtual bank also intends to introduce various digital trade finance services to SMEs.
On September 28th, China Everbright Bank and Alibaba Cloud signed a contract to jointly build the “China Everbright Bank-Alibaba Cloud Cyber Security Joint Innovation Laboratory” (中国光大银行-阿里云网络安全联合创新实验室). According to the framework cooperation agreement between the two companies, the two parties will focus on using artificial intelligence, Internet of Things, blockchain, and big data to conduct key research on cyber security and advanced solutions.
Cross-border payment solution provider Airwallex announced that it had closed its extended Series D funding with an additional USD40 million. In April, the Hong Kong-based company announced the closure of its USD160 million Series D funding round. This takes the total equity funding raised to date by the company to over USD400 million. Airwallex has said that the additional investment will be used to strengthen its existing footprint in key regions such as the Asia Pacific and Europe, and to build a global digital infrastructure.
The PBoC officially approved China’s largest online travel agency, Ctrip.com’s (携程) application to acquire Shanghai Oriental Information Technology Service Company (东方汇融) on September 26th. The wholly-owned acquisition provides Ctrip.com with the central bank's third-party payment license. Ctrip stated that it hopes that its acquisition can further “improve the convenience of payments in the cultural and tourism industry” and “accelerate the recovery of China’s tourism industry,” which has been badly hit by the Covid pandemic.
Ant Group unveiled Trusple, an AntChain-powered global trade and financial services platform for SMEs and financial institutions at the Inclusion Fintech Conference on September 25th. Trusple works by generating a smart contract once a buyer and a seller upload a trading order on the platform. As the order is executed, the smart contract is automatically updated with key information, such as order placements, logistics, and tax refund options. To help optimize cross-border processes, Trusple has partnered with various leading international financial institutions, including BNP Paribas, Citibank, DBS Bank, Deutsche Bank and Standard Chartered Bank.