New news from Tiktok Pay.
On June 18, the reporter of the Huaxia Times noticed that the official website of the People's Bank of China disclosed the information on the license change of major matters of non bank payment institutions (as of June 2024), which showed that Wuhan Hezhong Yibao Technology Co., Ltd. (hereinafter referred to as "Hezhong Yibao") was approved to change its name to "Tiktok Payment Technology Co., Ltd.". As of June 18th, 36 payment companies have been approved for renaming within the year, with the word "payment" added to their names.
On June 18th, Wang Pengbo, a senior analyst in the financial industry at Broadcom Analytics, told a reporter from Huaxia Times that licensed payment institutions should indicate the word "payment" in their names and prohibit other units and individuals from using "payment" and conducting related business in violation of regulations. This move is conducive to clarifying the boundaries of payment business and helping financial consumers distinguish. Institutions that have not yet been renamed will also approach this requirement in the future.
At present, although there are two giants in the payment field, Alipay and WeChat payment, the strength of Tiktok payment should not be underestimated. In addition to being a payment tool, Tiktok payment is also a link to financial services such as financing, credit and insurance of Tiktok Group, helping to improve the financial ecology of the platform.
Change to "Tiktok payment"
Recently, the People's Bank of China issued a public notice on major changes in non bank payment institutions (as of June 2024). The information shows that the People's Bank of China has agreed to change the name of Wuhan Hezhong Yibao Technology Co., Ltd. to "Tiktok Payment Technology Co., Ltd.".
Dong Ximiao, the chief researcher of China Merchants Association, told reporters that after the name change, the name of "Tiktok Payment" can better reflect the actual changes in equity, which is easier for financial consumers to understand and identify. For Tiktok Group, the brand exposure is more direct, which helps Tiktok brand building in the financial field.
According to the official website of UPE, the company was founded in 2012, and obtained the Payment Business License issued by the People's Bank of China in 2014, becoming a licensed Internet payment enterprise. The company's qualifications include a payment business license, a value-added telecommunications business operation license, and a membership certificate of the Payment and Clearing Association.
The reporter found that at present, the official website of Unigroup Yibao has been hung with the words "Tiktok Payment".
In fact, in August 2020, Tiktok's affiliated company Tianjin Tongrong completed the acquisition of Hezhong Yibao, and Hezhong Yibao became the license subject of Tiktok payment at that time.
Tianjin Tongrong holds 100% equity of Hezhong Yibao. Tianjin Tongrong was established in August 2013. In April of this year, its registered capital increased from 700 million yuan to 2.15 billion yuan. Enterprise investigation shows that Beijing Shibei Technology Co., Ltd. holds 100% of the equity of Tianjin Tongrong. After the equity penetration, Zhang Yiming, the founder of Tiktok, holds 99% of the equity of Beijing Shibei Technology Co., Ltd., which means that both Hezhong Yibao and Tiktok Tongrong are affiliated companies of Douyin.
According to Qichacha, currently, Hezhong Yibao has a total of 5 self risks, including 5 judicial lawsuits. The latest infringement liability dispute information was added on June 12, 2024, involving four companies, including Hezhong Yibao, as defendants. The cause of the case was a liability dispute for violating security obligations.
In recent years, Tiktok has started to speed up the layout of financial business. In just a few years, it has received many financial licenses, which can provide consumer credit, insurance brokerage and other services. For example, in April this year, Tianjin Tongrong also planned to acquire 100% equity of Lianhe Commerce under Hailian Jinhui.
Lianhe Commerce has a payment license and can engage in bank card acquisition, Internet payment and mobile phone payment business nationwide. In the industry's view, this also means that Tiktok payment plans to supplement offline acquiring business licenses.
Previously, the parent company of Lianhe Business, Lianhe Advantage, was acquired by Hailian Jinhui for a price of 3 billion yuan. However, in recent years, Lianlian Advantage has repeatedly received large fines for payment business violations. According to incomplete statistics, Lianlian Advantage has received a total of approximately 49 million yuan in fines for violating relevant regulations.
"The previously acquired payment institutions have online payment qualification, and Tiktok has also built a complete online payment system based on this." Wang Pengbo said that after obtaining offline bank card acquiring qualification, Tiktok Payment can further expand online payment business, complement the commercial closed-loop and reduce channel costs.
On the one hand, building a self built payment channel reduces the platform's reliance on third-party institutions, making it more flexible in payment methods, settlement cycles, and refund processes. At the same time, it reduces interface jumps and improves the user payment experience. On the other hand, directly managing payment channels means that the platform can better control the flow of payment data, improve data security, and reduce potential risks caused by third-party intervention.
Later on, those who came first
At present, there are two giants in the payment field, Alipay and WeChat payment. Why did Tiktok join at this time?
As a latecomer, Tiktok has shown significant potential in the field of payment.
Although Alipay and WeChat payment have penetrated into all aspects of people's lives, Tiktok is a super APP, with hundreds of millions of daily lives. The number of users is huge and the platform's transaction volume is growing, providing a broad user base for the rapid promotion of payment services.
The 2023 Annual Data Report of Tiktok Life Service released by Tiktok Life Service shows that the total transaction volume of the platform will increase by 256% in 2023. Compared with last year, the short video transaction volume of the platform will increase by 83%, and the live video transaction volume will increase by 5.7 times.
The large amount of payment data precipitated by the Tiktok platform can better analyze users' consumption preferences, payment habits and mental decision-making process, so as to provide personalized financial services.
Some consumers told reporters that they were too "addicted" to buy things in Tiktok, and unconsciously placed a lot of orders for goods, because they were cheap, unsuitable and too lazy to return.
"In the year when I was addicted to Tiktok, I placed orders with passion every night and often brushed the live broadcast until more than one o'clock in the morning. Tiktok knew me better than anyone else," said a female consumer.
Currently, short video sales and live streaming sales have become one of the mainstream ways for people to shop, which is equivalent to opening an online supermarket for consumers, equipped with a 24-hour "shopping guide" to place orders at any time. Tiktok is a short video and live broadcast platform for the head. It has a unique consumption scene, and the payment conversion rate is naturally not low.
As an important part of Tiktok's financial ecology, Tiktok payment is no longer a single payment tool, but a link to its financial services such as financing, credit and insurance, helping to improve the platform's financial ecology.
36 payment institutions changed their names within the year
In addition to Tiktok Payment, there are four other institutions that have changed their names, and all of them have added the word "Payment" to the company name.
Specifically, UnionPay Business Co., Ltd. changed its company name to "UnionPay Business Payment Co., Ltd."; Zhejiang Aerospace Electronic Information Industry Co., Ltd. changed its company name to "Zhejiang Xinhang Payment Co., Ltd."; Sichuan Shangtong Industrial Co., Ltd. changed its company name to "Sichuan Shangtong Payment Technology Co., Ltd."; Tianjin City One Card Co., Ltd. has changed its company name to "Tianjin City One Card Payment Co., Ltd.".
On May 31st, the People's Bank of China updated the "Announcement of Major Change Permits for Non bank Payment Institutions", which showed that 31 payment institutions were approved to change their names, and all relevant institutions added the word "payment" to their company names.
As of June 17th, 36 payment companies have been approved to change their names within the year, all of which have added the word "payment" to their names. This large-scale renaming of the institution is closely related to the "Regulations on the Supervision and Administration of Non Bank Payment Institutions" that came into effect on May 1st this year.
The Regulations on the Supervision and Administration of Non bank Payment Institutions stipulate that the name of a non bank payment institution should indicate the word "payment". Without approval in accordance with the law, no unit or individual shall engage in or indirectly engage in payment business, and shall not use the word "payment" in the name and business scope of the unit, except as otherwise provided by laws, administrative regulations, and the state. After the payment business license is lawfully revoked, the name and business scope of the institution shall not continue to use the word "payment".
"The renamed payment institution not only enhances the recognition of business entity names, but also enhances compliance," said Su Xiaorui, senior researcher at Suxi Zhiyan.
Wang Pengbo believes that this move is conducive to clarifying the boundaries of payment business and helping financial consumers distinguish. Institutions that have not yet changed their names will also follow this requirement in the future.