Huawei has obtained a Chinese nonbanking payment license, giving the company a foothold in a fintech sector dominated by Tencent and Ant Group as those firms grapple with regulators.
Huawei obtained the permit by acquiring an existing license holder by purchasing Shenzhen payments firm Xunlian Zhipay on Thursday from Shanghai Woruiou Information Technology Co.
Xunlian was founded by ZTE and in 2014, and was issued a nationwide license to provide payment services via its website or mobile phone. The license is valid until July 2024.
In China, as well as an approved business licence, firms also operate on a general payment services (PSO) licence issued by the People’s Bank of China (PBOC). Huawei has secured both of these through the deal.
Exactly how Huawei intends to use the license is unclear, although Huawei has already entered into the payment industry by creating mobile payment service Huawei Pay in 2016.
Huawei Pay allows Huawei phone owners to pay for goods online, as well as in bricks-and-mortar stores and for bus rides even with the connection turned off. The services are based on near field communication (NFC), a technology that hasn’t found many users in China. Consequently, it is necessary for Huawei to hold a payment license since the company wants to provide more payment and other financial services
In July last year, Huawei Wallet launched a function called “Merchant Collection”, which is an innovative multifunctional mobile collection product; in September last year, Huawei and China CITIC Bank launched the China CITIC Bank Huawei Card credit card, which enables comprehensive online management of credit card bills through the Huawei Wallet App.
A Huawei spokesperson on Monday confirmed the deal but did not disclose its terms.
