China Fintech Newsletter – Nov. 13-19

Tencent reported 280% year-on-year growth in monthly offline payment volume in the third quarter. The social and gaming giant provides payment services through WeChat and Mobile QQ, the most popular messaging apps in China.

aiBank (aka. Baixin Bank), the direct bank co-established by search giant Baidu and China CITIC Bank, opened for business. Their initial offerings include consumer credit, small business loans and wealth management products. Baidu has a 30% stake in it. (Source in CN)

Speaking of Baidu, it launched a series of technology solutions for financial services and financial products at its annual conference:

  • A big data-based risk management solution, a web-based securitization platform called Panruo, and a consumer financing solution.  (Source in CN)
  • AB Dai, a loan product using the credit scoring system developed by Baidu and co-launched with Agricultural Bank of China. (Source in CN)
  • An RMB30 billion (US$4.5 billion) ABS fund co-established with Shanghai Pudong Development Bank. (Source in CN)

PBoC, China’s central bank, plans to fully open up China’s digital payment sector, said Fan Yifei, vice governor of the PBoC, on 2017 China Payment and Clearing Forum on 16th. (via Xinhua)

LexinFintech files for an IPO of US$500 million on the NASDAQ

Industrial and Commercial Bank of China, China’s biggest bank and one of the largest banks worldwide, launches AI Tou, a robo-advisor. (Announcement in CN)

Facial recognition tech developer SenseTime announced a strategic investment from Qualcomm Incorporated. Earlier in July, it announced US$410 million Series B round of funding. (Source in CN)

SenseTime’s personal remote authentication (face verification, OCR recognition of ID card and bank card) and paper receipt recognition solutions are used by a range of financial services apps and terminals including JD’s mobile wallet app and China Merchants Bank.

Digital financial services provider 9F Group (“Jiufu”) announced “hundreds of millions of dollars” new funding from China Cinda (HK) Holdings Company, Jason Jiang (founder of Focus Media), Lin Qi (founder of Youzu Interactive), and a local industrial fund. (Announcement in CN)

The company’s businesses range from online investment products sales, peer-to-peer lending, robo investing to big data-based personal credit scoring. Founded in 2006, 9F claims to have more than 46 million cumulative users and over 90% of the users access its services through mobile. (Source in CN)

Yirendai reports Q317 results. The total loan originations grew 117% year-over-year.

76% of the total borrowers (193,000) were acquired from online, and 57.2% of the total loan volume was transacted from online channels. Nearly 100% of the online loan volume was facilitated through the mobile end.

All the investors invested through the company’s online channels, and 93% of them used Yiren Wealth, the mobile app for investors to invest in peer-to-peer loans, or purchase mutual funds or insurance. The mobile app had 481,000 monthly active users in September, a 20% year-over-year growth.  (Earnings call transcript)

Some takeaways related to Alipay from Qudian Q317 earnings call.

  • Almost 50% of the new borrowing engagement was from Alipay.
  • Qudian had paid Alipay on a cost-per-click basis from April when its retail installment service was added onto Alipay app to September and began to pay on a cost-per-sale basis from October 1st.
  • In the third quarter, for the first time, all of the payment transactions were processed through Alipay.

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