Chinese internet major Bytedance (字节跳动) is trying to obtain licenses to launch financial services in Hong Kong, financial news portal Caixin reported on September 12.
Bytedance, formerly known as Toutiao, is the only one among the 20 big internet companies of the country without a financial service.
Bytedance has however been trying to obtain licences to enter the fintech industry for quite some time now. However, its efforts were thought to be directed at Mainland China.
In the beginning of 2018, the fintech portal Paynews reported that Bytedance was negotiating the acquisition of Wuhan Hezhong Yibao (武汉合众易宝), an online payment company, along with Yibao’s licenses. Last year, Bytedance applied for a license to provide small loans in Ningxia province.
Although the company has been consistently denying these reports, it launched a financial service within JinriToutiao, its news app in July this year.
Known as Fangxinjie, the service offers loans up to CNY 200,000 at a daily interest rate starting 0.03%. While Bytedance serves as a traffic-attracting platform, Bank of China Consumer Finance, Nanjing Bank and XWBank served as the financial institutions.
Fangxinjie’s model follows a usual route taken by tech companies in the country to dodge the complexities of obtaining licences in the early stages entering the fintech business.
The service, however, hit troubled waters earlier this month after Ling Jianping, a freelance reporter claimed that the product is illegal as it fails to state its exact nature, does not possess requisite permits and violates user privacy. Bytedance has neither responded to the allegations nor stopped the service yet.
The car-hailing app Didichuxing and the group-buying company Meituan Group offer similar services.
However, Bytedance is a bit late in the game. Mainland China already has formidable players in the financial technology field such as Alibaba’s Ant Financial and JD Financial. Meituan and Didi are also in the market. There is hardly much space left for Bytedance.
The company’s decision to operate in Hong Kong should come as no surprise.