BankTech

Tencent can Now Officially Perform Banking Operations

MEDICI

The China based company has been given approval by the country’s banking regulator to open its doors to clients as a private bank. The launch of Tencent’s private bank marks a changing trend in China’s closely guarded banking sector that currently dominated by state owned banks. In order to bring more lending channels to China’s SMEs, the banking regulator has approved the development of more than 10 lending companies across major provinces in China.

Tencent currently funds Webank, a lender with focus on providing loans to individuals as well as SMEs. Webank will officially start operations by the end of this month. In its efforts to boost lending to small businesses, China’s banking regulator is paying more attention to private institutions. Tencent had applied for the banking license around 14 months ago.

This recent move by the banking regulator will help the country's slacking small business sector by having these new banks issue fresh funds for growing businesses. Tencent's bank can now looking forward to serving owners of SMBs with "innovative financial products" based on WeChat. Tencent's social networking app has a user base of 468 million which will be beneficial for processing online payments.

Tencent Holdings provides value aded services in Internet, mobile, and telecommunications in China. Tencent’s Tenpay service can be used to send/receive payments, withdraw money from bank accounts, charge mobile accounts, deposit money in game accounts and buy air tickets. Tenpay has over 80 financial institutions with over 300 access points. The company has partnered with over 1.1 million merchants spanning 20 industries including travel business, insurance, online shopping, logistics, clothing and education.

Wechat 5.0 introduced payment features enabling users to scan barcodes of different products on their smartphones. If the products are available online, users will be directed to different e-commerce portals to complete the transaction. The app also recognizes scanned book and CD covers for online purchases. WeChat has a secured payment system wherein the user needs to input bank account details for any purchases made on the app. Through this, the user can buy movie tickets or coupons from various merchants directly through the Wechat application. The payment is transacted through Tenpay, Wechat’s third party payment channel.

With an effective payments service portfolio already set up by Tencent, the new banking license will now enable Tencent to become one of the strongest competitors to the state owned players, who have so far dominated this landscape.

MEDICI Team

MEDICI

MEDICI Team is a group of content writers, bloggers, journalists, researchers, and editors from the MEDICI who collaborate to create FinTech insights.

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