Huawei gained a mobile payment license after purchasing full control of Sharelink Network Co., a licensed digital payment firm, suggesting that the Chinese telecom giant wants a piece of an industry over which major payment platforms Alipay and WeChat Pay have assumed dominance.
According to information compiled by Chinese enterprise data query website Tianyancha, Huawei recently bought complete stakes in Shenzhen-based Sharelink from its parent company Shanghai VRTime, China Securities Journal reported. Through the deal, Huawei has established its credentials as a mobile payment service provider.
Huawei has kept a close eye on the mobile payment market for years. In August 2016, Huawei joined UnionPay — China’s dominant bank card clearing service provider — to introduce Huawei Pay, which employs biometrics and near-field communication technology to allow users to complete their transactions by tapping their Huawei device near the point-of-sale terminal instead of their bank cards, South China Morning Post reported.
In October of the same year, Huawei’s former cloud services president Su Jie emphasized that the company would not apply for a third-party payment license. “(Huawei cloud services) will heighten its sense of boundary and focus on those things it is truly good at,” Su said during a press conference.
Meanwhile, Huawei’s enormous base of around 200 million phone users has given the firm a huge advantage in the mobile payment market.
Apart from Huawei, smartphone maker Xiaomi, e-commerce platform Pinduoduo and TikTok owner ByteDance also received their third-party payment licenses through acquisition. Other Chinese internet and e-commerce giants which have obtained third-party payment licenses include Baidu, JD.com, Suning, Meituan, Sina, NetEase and Vipshop. However, it is difficult for them to compete with Ant Group’s Alipay and Tencent’s WeChat Pay as these two payment platforms handle more than 80% of mobile payment transactions in the country.
Profits accruing to companies from the mobile payments business are substantial. Companies can make money from transactions, charge other companies to use their payment services and collect the payments data to be used in everything from advertising to product optimization. According to data by Statista, in 2019, the total transaction value of mobile payments in China reached 347 trillion yuan.
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Last October, Huawei launched its Mate 40 series of smartphones featuring a hardware wallet for digital yuan.
Huawei’s push to go after mobile payment comes as Beijing is tightening its grip on the country’s rapidly-growing internet industry. The Chinese government abruptly ordered a halt to Ant Group’s initial public offering in November, which was set to raise more than $37 billion and would have become one of the biggest IPOs in history.