On December 11th, 2017, China Union Pay (CUP), together with over 30 commercial banks and payment institutions, launched a new version of its mobile payment APP, QuickPass (云闪付), starting a new battle in the mobile payment industry.
Yu’E Bao, the world’s largest money-market fund, may have to limit its individual investment amount at RMB500,000 (USD$72464), which is half of the amount the limit is now. The implications aren't for certain at this point, but it could mean the end of the platform's growth in the future.
Last week, Alibaba’s finance arm rebranded their “Small and Medium Financial Services Company today to “Ant Financial Services Group” or “Ant Financial”.
This past weekend Alibaba and Baidu met with the People's Bank of China (PBOC) in a closed door session to discuss the ongoing challenges with Chinese online finance regulation. The fact that the regulators are consulting with the industry is a great sign that the regulations will (hopefully) be built on consultation and discussion, and as both Baidu and Alibaba have intentions of setting up their own private banks, it's likely in their best interest to sit down with the regulators as well.
Over the past week news headlines have been awash with how Chinese banks are pushing back against Alibaba's Yuebao and Laicitong as the online finance products have rapidly grown their AUM at the expense of bank deposits. The banks now are expanding their push though and are challenging money funds' market share in China.
In another foray from the Internet giant into high finance, Alibaba recently announced that one million virtual credit cards will be issued next week.
Money funds in China have been around for a long time with the first launched just over a decade ago in 2003. For the most part, these funds existed in relative harmony with the banking industry and occupied a small niche in the investment market. However, the emergence of Yuebao in 2013 started to change that. Money funds have now grown significantly in prominence and present an increasing threat to traditional banking services.
Yu’ebao had already made Tianhong Asset Management the largest one in the public fund industry in China in early 2014. However, the scale of Yu’ebao has continued to grow with the latest figures showing the AUM of Yu’ebao reaching RMB400bn on Feb 14, 2014, a leap of 60% compared to only one month ago. The speed of capital inflow is still accelerating in 2014. We may witness Yu'ebao becoming the largest money market fund in the world soon.
The fast expansion of Yue bao AUM data of Chinese money market funds, especially the ones leveraging Internet Finance, reflects the large wealth management demand potential of Chinese market and new innovative finance forms that will appear in the Chinese market in 2014.
Not satisfied with just taking deposits from banks, online finance platforms are facing more competition from each other.
The latest figures from Tianhong Asset Management show that the AUM (asset under management) of Yu’ebao deposits, the currency market fund which is co-launched by Alibaba and Tianhong on 13 June, 2013, has rocketed from June 13th to November 14th, 2013, from 0 to CNY100B. Now Yu’ebao is the largest fund in China leveraging it's enormous Taobao, T-mall and Alipay customer base.
The success story of Yu’ebao has not only encouraged the Chinese IT giants and online payment providers to enter the asset management market, but also is a worry to the traditional asset management firms. Currently, most public funds in China sell their products on their own websites or choose to cooperate with the online platforms to sell their products. Asset managers do recognise the benefit of selling funds online including low cost and convenience, but struggle as they simply just do not have the customer base of Alibaba/Alipay.
|Date||13 June||30 June||9 Sept||14 Nov|