Rumor: Alipay, Asset Management Firm Partner on Balance VAS
DoNews, 6/05/13
An industry source reported on June 4 that Chinese third-party payment processor Alipay is partnering with Tianhong Asset Management on a "balance value-added service" allowing users to purchase money market funds or other financial products directly through the Alipay website. Funds in users' service accounts will be usable at any time for online purchases, Alipay remittances, utility bill payment, or transfers to users' Alipay account balances.
Initially, Alipay's "balance VAS" will support "Zenglibao," a currency fund product designed for Alipay users by Tianhong. Tianhong Asset Management will be the only organization selling the product, and Alipay will be the only direct-sales promotion platform for Zenglibao.
In the future, Alipay users' accounts will comprise two independent sections — their existing accounts and the newly added "Balance VAS accounts" — which can be connected via the Alipay interface's "Transfer Funds" button. When users transfer funds into their VAS accounts, Alipay's systems will connect to mutual fund companies' systems to set up new fund accounts or purchase fund products as necessary. Transfers of funds from users' VAS accounts to their Alipay accounts will be treated as cashing equivalent sums of money out of the currency funds. Users will be able to make Alipay payments using either account balance, and payments made using VAS account balances will not be subject to any minimum purchase requirements.
According to the source, fund companies will charge users fund management fees, which they will deduct from users' VAS account earnings. Alipay and funds have yet to settle on a percentage for the service, the source said, but the final number will "definitely" be lower than general market rates.
Alipay's initial plans for the service reportedly call for 10 mln or more new users to sign up for VAS account services this year.
Editor's Note: For more background on this topic, please see "Alipay Denies Rumor of Paying Interest" MD 5/28/13 issue.
Keywords: Tianhong Asset Management Internet Alipay third-party payment VAS
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