Douyin threw 1.4 billion yuan and will buy a payment license, and the industry trembled.

E-commerce newspaper Pro

2024-04-08 10:41Posted on the official account of Guangdong E-commerce News

Douyin Pay will complete the offline acquiring business license

Recently, Douyin has made a big move again.

Hailian Jinhui, a listed company, recently announced that it intends to transfer its wholly-owned third-level subsidiary, UMF E-commerce Co., Ltd. (hereinafter referred to as "UMF"), to Tianjin Tongrong E-commerce Co., Ltd. (hereinafter referred to as "Tianjin Tongrong").

Source: Hailian Jinhui announcement

Tianyancha shows that Tianjin Tongrong was established in 2013 and is wholly owned by Beijing Shibei Technology Co., Ltd. The latter is 99% owned by Douyin founder Zhang Yiming, and Douyin Group Chairman Zhang Lidong holds 1%.

Source: Tianyancha APP

To put it simply, Douyin plans to acquire 100% of the shares of United Ventures.

The transaction price is the benchmark transfer consideration of 750 million yuan + net assets ± other matters on the delivery date. As of December 31, 2023, the net assets of UMF Business are 649 million yuan, and the total price of this transaction is nearly 1.4 billion yuan.

Spending nearly 1.4 billion, Douyin spent a lot of money to complete the last piece of the puzzle of Douyin's payment license.

It is understood that UMF was established in 2011 and has the "Payment Business License" issued by the central bank, which can engage in bank card acquiring, Internet payment and mobile phone payment business nationwide.

The Company's main business focus is offline bank card acquiring. Bank card acquiring business refers to the act of collecting monetary funds for special merchants of bank cards through point-of-sale (POS) terminals. For example, the POS machine in the offline store swipes the card to receive the order, and the QR code scan the code to receive the order.

As early as 2020, Douyin has taken control of Wuhan Hezhong Yibao Technology Co., Ltd. (hereinafter referred to as Hezhong Yibao), the main business entity of "Hezhong Pay", through external acquisitions, so as to obtain an Internet payment license.

In 2021, Douyin Pay was officially launched in the Douyin APP. The launch of Douyin Pay coincides with Douyin's vigorous development of live broadcast e-commerce, and the layout of payment links is conducive to improving the closed loop of platform transactions.

In 2023, the official website of Douyin Pay will be launched. At that time, it was reported that Douyin negotiated with a number of national acquiring payment companies, planned to acquire the old payment company Kuaiqian for 1 billion yuan, and obtained the national right to operate the offline bank card acquiring license, to which Douyin Group responded that the news was untrue.

Source: Beijing Business Daily

Now the announcement that United Business will be acquired by Douyin means that the boots of Douyin's offline acquiring license are about to land.

In this regard, the relevant person in charge of Douyin payment said that the transaction is to support offline transaction scenarios such as life services, and provide users and merchants in the Douyin system with a more convenient payment and service experience.

According to Tianyancha, Tianjin Tongrong, the party of this transaction, holds 100% of the equity of Hezhong Yibao, the license subject of Douyin Pay. After the completion of the transaction, UMF will be merged with United Yibao.

It should be noted that this transaction is subject to the approval of the People's Bank of China and the review of the concentration declaration of the State Administration for Market Regulation, and there is uncertainty about the approval result and the timing of the final decision.

Douyin pay to eat at the table

At present, Internet platforms including Ali (Alipay), Tencent (Tenpay), JD.com (online banking online), Meituan (Qian Daibao), Pinduoduo (Paypass), Xiaomi (Jiefu Ruitong) and other Internet platforms have also had qualifications such as Internet payment and bank card acquiring.

However, among these companies that hold payment licenses, only a few companies that really have market influence and are widely known are WeChat Pay and Alipay.

It is reported that WeChat Pay and Alipay have occupied more than 90% of the domestic mobile payment market.

With the help of this acquisition, Douyin has been included in the qualification of bank card acquiring, which represents a more complete business of Douyin in the payment sector. At the same time, Douyin Pay's entry into offline also means more competition with the two giants in the industry.

Douyin is difficult to make offline payments, but it is not completely impossible. First of all, Douyin has grown into a new national app, with a huge user base and hundreds of millions of daily active users.

According to data from QuestMobile, during the Spring Festival in the Year of the Dragon, Douyin's average daily active users reached 908 million, and the average daily usage time exceeded 7 hours.

With the development of the times, short video platforms such as Douyin are occupying more user attention. At the same time, thanks to user algorithms, social networking and other attributes, Douyin's user stickiness is also very high.

At that time, WeChat was also slightly better than Alipay by virtue of its high-frequency social attributes. Douyin has made full efforts to pay, or it may strive for the status of the "third pole" of mobile payment.

Secondly, Douyin's e-commerce atmosphere has become stronger and stronger in recent years, and there are more and more payment scenarios. Just recently, Douyin e-commerce officially stepped out of Douyin and launched the Douyin mall version of the APP.

In addition to online, Douyin is also accelerating the layout of offline local life business. According to official data, in 2023, the total transaction volume of Douyin life services will increase by 256%, with stores covering 370+ cities and more than 4.5 million stores growing here.

Source: Douyin Life Service Official Account

As more and more merchants settle in Douyin's local life, it is already imminent for Douyin to open a payment channel for offline acquiring.

This mainly involves the cost of payment channel fees, data security, etc. Large-scale and high-frequency transactions are often the most reassuring in their own hands.

According to the analysis of industry insiders, having its own payment channel can reduce costs and reduce dependence on other platforms, which belongs to the "defensive" strategic layout of Internet companies. For platforms with offline scenarios, having bank card acquiring qualifications can achieve an ecological closed loop and better achieve business development.

Today's Douyin has no shortage of user traffic and consumption scenarios, which are also indispensable for payment. In addition, with the completion of the license, Douyin Pay may show greater strength.

The purchase of payment licenses, a few happy and a few worried

In recent years, there have been more and more cross-border payments on Internet platforms, in addition to Douyin, Kuaishou and Bilibili have also laid out payment actions.

In 2020, Kuaishou revealed in its prospectus to Hong Kong that it intends to acquire the entire equity of X Pay Company at a price of 850 million yuan, and is ready to use internal resources for cash settlement.

However, so far, there is no official announcement of Kuaishou's wholly-owned acquisition of the X payment company.

It is likely that X is Yilian Pay. After the completion of the acquisition, Kuaishou holds more than 50% of the shares of Yilian Pay and becomes the largest controlling shareholder of Yilian Pay. Kuaishou and Yilian Pay have not publicly responded to this statement.

In addition, according to the equity penetration of industrial and commercial information, Kuaishou does not seem to have won this license.

In 2021, the status of a number of "Laotie Pay" trademarks applied for registration by Beijing Dajia Internet Information Technology Co., Ltd., an affiliate of Kuaishou, was changed to "registered". The registered trademark is considered to be an important move for Kuaishou to enter the payment business.

Source: Tianyancha APP

In March this year, the Guangzhou Municipal Local Financial Administration updated the approval of the equity change of a small loan company, agreeing that Guangzhou Huaduo Network Technology Co., Ltd. will transfer 100% of the equity of Guangzhou Huanju Microfinance Co., Ltd. to Beijing Yunyu Technology Co., Ltd.

Beijing Yunjie Technology Co., Ltd. is an affiliate of Kuaishou. This also means that Kuaishou has obtained an online small loan license and is expected to enter the consumer finance business. The Kuaishou payment license is gone, but fortunately, it has won the online small loan license and opened a breakthrough.

At the same time, there have also been changes in the payment license transaction of station B. At the end of February this year, the Ningbo Branch of the People's Bank of China has officially issued the "Decision on the Inadmissibility of Administrative License Application", which will not accept the administrative license application of Shanghai Kuanyu Digital Technology Co., Ltd. (i.e., Bilibili) to become the main investor and actual controller of Yongyi Pay.

In this regard, it is reported that the two parties to the payment license transaction are still in communication.

Spending money to acquire a "licensed" company has always been the mainstream solution for Internet companies to deploy payments. In the early years, the payment license was even more expensive.

In 2016, Hailian Jinhui completed the acquisition of 91.56% of the equity of UMF at a high price of 3.039 billion yuan, refreshing the historical peak of the transaction value of the payment license in one fell swoop, and in the same year, Meituan spent 1.35 billion yuan to acquire Qiandaibao.

In 2017, Gome won Yinyingtong for 720 million yuan, and in the same year, Didi Chuxing acquired 100% of the equity of 19pay at a cost of 300 million yuan.

However, in recent years, the price of payment licenses has shrunk significantly, and industry supervision is gradually strengthening.

From May 1 this year, the Regulations on the Supervision and Administration of Non-bank Payment Institutions will come into effect, which will be the first administrative regulation for the supervision of payment institutions in mainland China.

According to the analysis of industry insiders, although the Internet payment license is highly sought after during the bonus period of the payment license, with the rectification of the industry and the strengthening of supervision, non-head payment institutions are facing survival pressure, and the license transfer is becoming more and more difficult. The Regulations issued at the end of 2023 have made the division of industry standards more refined and raised the threshold for payment license acquirers.

From an industry perspective, the acquisition of payment licenses will face new regulatory requirements, which will be a big challenge for different entrants. It doesn't seem to be so easy to spend money on a payment license.

For Douyin, a big manufacturer, the industry price bubble is gradually receding, which is indeed a good time to enter the game. At the same time, new regulations also mean that there will be new opportunities.

As the saying goes, "the bigger the wind and waves, the more expensive the fish", Douyin, which is facing difficulties, may bring a new pattern.

Author | Pandora

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