JD.com’s Fintech Unit Plans to Spend $230 Million to Get Second Payment License
Chinese e-commerce giant JD.com Inc.’s fintech unit plans to spend 1.6 billion yuan ($230 million) to get its hands on a second payment license, sources familiar with the matter told Caixin, as it seeks to expand its growing financial services business for brick-and-mortar merchants.
Jingdong Digits Technology Holding Co. Ltd., or JD Digits, aims to get the license by acquiring payment platform 99Bill Corp., which is currently controlled by Dalian Wanda Group Co. Ltd., one of China’s largest real estate conglomerates.
With the deal, JD Digits aims to make money by providing services for brick-and-mortar stores and small businesses, the sources said, rather than compete head on with Alipay and WeChat Pay in mobile payments, on which the two platforms have a lock.
JD Digits already has a payment license, which JD.com acquired in 2012 when it purchased Chinabank Payments Technology Co. Ltd. The license allows JD Digits to provide card payment transactions services to merchants, though only within the borders of Beijing (link in Chinese).
The second license will allow JD Digits to expand that business nationwide.
The planned acquisition of 99Bill is aimed at more than just obtaining the license. It also offers an opportunity for JD Digits to tie up with Wanda’s vast network of offline resources, according to the sources.
In recent years, China’s internet and tech giants have been looking to expand their financial services businesses, which range from payments to online lending, to generate more revenue and profit as growth in their core businesses slows.
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