Alibaba Group Holding Ltd. started offering a cloud computing service known as Ju Baopen for banks and securities firms, as Chinas largest e-commerce company ventures into financial-related services.
At least eight banks including Xiamen Bank Co., China Bohai Bank Co. and Tianjin Rural Commercial Bank Co. are able to provide online payment services by using Alibabas cloud computing service, according to an e-mailed statement from the Hangzhou-based company yesterday. The banks online platforms will also be connected to Alipay, the companys third-party transaction system.
Billionaire Jack Ma, Alibabas founder, is driving an expansion into financial services by the company that runs an online marketplace for goods from frozen mackerel to acupuncture lasers to Boeing Co. 737s. Alibaba is considering moving toward a listing in the U.S. and has been valued at $120 billion according to the average estimate of six analysts.
Alibaba is trying to build information technology systems for financial institutions as it promotes Alipay, which handled at least 35 billion yuan ($5.7 billion) of transactions on Chinas Singles Day sales promotion. Chinas more than 2,000 regional banks can start providing online payment services at lower costs with Alibabas Ju Baopen, it said in the statement.
"While most smaller scale banks already have online payment systems, a lot are not connected with Alipay," Yuan Lin, an analyst at Bank of China International Ltd. in Beijing said by phone. "By providing this service, it could benefit Alipay."
Ju Baopen, which means treasure gathering basin in Chinese, may appeal to smaller banks as it could help them become more efficient and minimize purchases from companies such as International Business Machines Corp., Oracle Corp. and EMC Corp., Alibaba said in a separate statement.