This Month in Fintech - China (July '22)

This Month in Fintech - China (July '22)
Editor’s Note
Welcome to our newest issue: This Month in Fintech - China, written by Ning Ye! Born and raised in China, Ning is deeply passionate about the technology scene back home. She now lives in New York City with her husband and two crawfish. Ning brings 10+ years of experience in the e-commerce and fintech industries. To subscribe to our monthly China newsletter, please sign up here.

Hello fintech friends,

We’d like to introduce the newest addition to the This Week in Fintech series: a monthly China edition! China has always been one of the world’s most dynamic and interesting fintech markets due to its potential and regulatory challenges. Please feel free to share any feedback!

News of the month
  • Henan Bank Crisis: In April 2022, thousands of customers of four rural banks in Henan and Anhui province were denied access to their accounts. The situation quickly escalated to a protest in front of the Zhengzhou sub-branch of the People’s Republic Bank of China (PBOC) on July 10. Recently, a fourth round of repayments to victims was announced, and a number of government officials have been probed for investigation.
  • Ant Group change of control: The WSJ reported that Chinese billionaire Jack Ma plans to cede control of Ant Group, the fintech affiliate of Alibaba, to reduce government risk. In addition, Eric Jing Xiandong is stepping down as the chairman and legal representative of Alipay, a major corporate entity of Ant Financial. Alibaba also announced that Alibaba and Alipay will terminate their data-sharing agreement.
In other news
  • Alibaba plans to apply for a primary listing in Hong Kong: If it proceeds, Alibaba will be dual-listed on both the New York Stock Exchange and Hong Kong Stock Exchange.
  • Following the Chinese government's ban on secondary digital collectible markets, Tencent is closing down its NFT platform. Wechat, the most popular social media app in China, has also reportedly banned accounts associated with cryptocurrency and NFT trading.
  • BAI Capital raised $700M to back China’s tech companies including fintechs: according to BAI Capital’s announcement, this latest funding round will be used to support global expansion of Chinese tech companies spanning retail, fintech, content and media, as well as web3 and metaverse.
  • China Merchants Bank called off the long planned banking joint venture with JD.com: This joint venture had been approved by top regulators.
  • TikTok owner ByteDance’s valuation dropped to below $300B: Reflecting the tech giant’s shelved IPO and the current government crackdown on tech giants, ByteDance’s valuation dropped 25% since last year.
  • The payment arm of the rideshare giant Didi was hit by a 4.27M yuan fine: Having been fined over 1B yuan by China’s regulator, Didi payments received an additional 4.27M yuan fine for 12 violations concerning transaction traceability and authenticity, opening accounts for financial firms, and neglecting to promptly communicate important risk events, Reuters reported.
  • PingPong Payments, a leading Chinese cross-border payments company, announced a partnership agreement to acquire services from BNP Paribas, the largest European bank.
Venture Financing
  • Visa is in talks to invest in HK Headquartered fintech Airwallex: With the most recent funding round of $100M in November, 2021 at a $5.5B valuation, cross-border payments provider Airwallex is now seeking an extension of $100-150M to its series E and Visa has reportedly shown interest.
  • Chinese cross-border payments company Lianlian Global is seeking as much as 1.5B yuan in its new funding round as it plans for a 2023 IPO in Hong Kong.
  • Tuotuo Digital raised tens of millions of Yuan in a new funding round: Founded in 2020, Tuotuo Digital is a new player in China’s already competitive cross-border payments industry. The new funding was led by Dewu Capital and will be used to build its payment and risk control infrastructure.
  • Cross-border service platform Wiinkle raised 20M yuan from Wuyue Capital and Xinrui Venture Capital: 36kr reported, Wiinkle is an official partner of Amazon Lending that provides working capital for sellers.
  • Shanghai Automotive Industry Corporation (SAIC) completes Dongzheng Auto Finance stake acquisition for $237M: Dongzheng AFC is one of China’s 25 auto financing technology companies. SAIC will own two auto financing companies after this acquisition.
Product launches
  • Airwallex launches online payments app on Shopify: Airwallex has been investing heavily in its acquiring business and recently launched a payment gateway plugin on the Shopify AppStore to help merchants easily accept global payments from their customers.
  • Amazon rolls out a new digital wallet for sellers: Amazon seller wallet will be free of fees aside from FX and international transfer fees. This could impact current cross-border payments players such as PingPong Payments and Airwallex.
  • Chinese cross-border payments company Lianlian Global introduced multi-currency wallet to the US sellers: Following their competitors PingPong Payments and Airwallex, Lianlian is also making a move to the US market with its multi-currency wallet offering.
  • China’s XTransfer expanding to wealth management and lending: Another Chinese cross-border payments provider XTransfer is now moving into wealth management and lending services to SMBs that are underserved by traditional banking.