The next target for TikTok’s parent company: Payments
ByteDance, the company behind TikTok and Douyin, has acquired a company with a license from the central bank to offer digital payments. Tencent and Alibaba dominate online financial services in China: Can an ambitious upstart capture market share?
ByteDance, owner of TikTok, Douyin, and many popular apps in China, has acquired a payment service called UIPay with the purchase of its operator, Wuhan Hezhong Yibao Technology.
- “The acquisition is to supplement the existing major payment options, and to ultimately enhance user experience on our multiple platforms in China,” ByteDance told Reuters today, “without elaborating.”
- In 2018, rumors surfaced (in Chinese) that ByteDance had acquired UIPay, but later reports indicated UIPay was acting as a service provider to ByteDance.
- The most valuable thing about UIPay may be the “highly sought after” payment license it holds from China’s central bank, rather than its software, staff, and technology.
What does this mean for the future of ByteDance?
Tencent and Alibaba dominate China’s online financial services, and especially mobile payments. But if there’s one company that seems equipped to take them on, it’s ByteDance with its algorithms and startup energy.
- ByteDance already operates consumer loan and insurance services: Payments are a natural next step.
A sign of ByteDance’s ambitions?
ByteDance itself did not buy the payments service. Rather, it was acquired by a different company called Tianjin Tongrong, which is owned by Zhāng Yīmíng 张一鸣, the CEO of ByteDance.
Zhang appears to be learning from Jack Ma (马云 Mǎ Yún), whose Alibaba nurtured Ant, the online financial services company that is soon set for a record-busting IPO. Ant was created by Alibaba but spun out as a separate company. This enabled Ma and other Alibaba executives to retain control while fundraising separately.
Even if TikTok dies without being sold, ByteDance is a company to watch.
