Billionaire Jack Mas third-party electronic payments operator agreed to offer services to fund companies in China, extending his footprint in the nations heavily regulated finance industry.
Alipay.com Co. has reached agreements with 37 companies, Florence Shih, a spokeswoman at Mas Alibaba Group Holding Ltd., said in an e-mail yesterday, confirming a filing with the China Securities Regulatory Commission. The specific forms of cooperation vary; in most cases, Alipay provides payment services on the fund companies official websites, Shih said.
The cooperation with the fund companies, including Bank of Communications Schroder Fund Management Co. and Aegon-Industrial Fund Management Co., will help Ma extend his reach in financial services, according to Wang Weidong of IResearch. Ma, chairman of Alibaba, which won regulatory approval in July to expand funding for its online loans business, has said Chinas financial industry needed an outsider to stir things up.
The cooperation has expanded Alipays service and made it a more convenient platform to buy fund products, Wang, an analyst at the Shanghai-based Internet consultant, said by telephone. This will help Alipay attract more users.
Tenpay, the online payments system of Tencent Holdings Ltd., also agreed to offer services to 10 companies, according to the filing with the regulator.
Alipay began offering currency fund products by Tianhong Asset Management in June on a new platform called YuE Bao, meaning leftover treasure in Chinese. The service attracted 2.5 million users with 5.7 billion yuan ($931 million) of investments by the end of that month, Alipay said.
Online shoppers who use Alipay have the option of putting their spare cash into YuE Bao to earn variable returns. The service has no minimum requirement and users can withdraw their money anytime.
The annualized return based on the latest seven-day average was 4.48 percent on Aug. 4, according to YuE Baos website. That compares with a 0.35 percent interest for savings-account deposits, according to Chinas central bank.
Beijing-based China Asset Management Co. this month began offering a service similar to YuE Bao on Tencents WeChat instant-messaging app. WeChat users can invest with a minimum of 100 yuan.
Alipay, which was spun off from Alibaba Group, Chinas largest e-commerce company, had more than 800 million registered accounts as of July. Alipay is now wholly owned by a Chinese domestic company thats about 46 percent held by Ma, according to company registries in May.
The Paypal-like service falls under Alibabas Small and Micro Financial Services Group, which is still under formation, the company said in an e-mail. Earlier this year, Alipay reorganized its operations into three units -- Shared Platform Business Group, Domestic Business Group and International Business Unit.