Xiaomi registered a payment service company as early as in 2013, but only in January this year did the company obtain an official license by acquiring a controlling stake in local online payment services company Ruifutong.
Like Apple Pay and Samsung Pay, Mi Pay has partnered with China UnionPay (CUP), the association for China’s banking card industry. Currently Mi Pay supports debit and credit cards from more than 10 Chinese banks.
Earlier in April Xiaomi and UnionPay jointly launched an NFC-based service for public transport fare payments. The service is currently only available in two cities, Shanghai and Shenzhen, but is under test in four more provinces and cities, according to the company. Xiaomi is one of the few smart device brands in China to provide such service.
MIUI 8, the latest version of Xiaomi’s customized Android system, has integrated Mi Pay and the public transport payments service. Preloaded in all Xiaomi smart devices and free for download, MIUI had surpassed 200 million users in May this year, according to Xiaomi.
China’s mobile payment market has so far been dominated by tech giants Tencent and Ant Financial, Alibaba’s finance arm. Alipay, the online payment service of Ant Financial, has reached more than 450 million active users. WeChat Payment, the mobile payment service provided by Tencent’s massively popular mobile messaging app WeChat, had seen 300 million accounts add their bank cards as of March this year. And the two leading payment services have been expanding overseas to take advantage of the rising tides of Chinese outbound tourists.
Mobile payment has become a very important field of competition between smartphone brands and mobile service providers. Apple Pay and Samsung Pay landed in mainland China in February and March this year respectively. Telecommunications equipment and service giant Huawei unveiled Huawei Pay through a partnership with Bank of China in the past March. Baidu, China’s largest search service company, is also heavily promoting the Baidu Wallet mobile payment service.
Since the establishment of their payment company, Xiaomi has added a variety of mobile financial offerings onto its software system. In early 2014 the company reached a partnership with Bank of Beijing on NFC-based payments, personal financial products and a few other related services.
Xiaomi Finance was unveiled in May 2015 as a mobile app. Unlike most other Xiaomi services that are integrated into the MIUI system, Xiaomi Finance is available for separate download through the iOS App Store and local Android app stores.
The first offering on Xiaomi’s Finance app is Xiaomi Huoqibao (Huoqi means “Current Deposit”), a money market fund similar to Yu’ebao provided by Alibaba’s finance arm. Like Yu’ebao, Xiaomi Huoqibao fund is managed by a third-party company, Tiantian Mutual Fund (our translation) of E Fund Management Co., Ltd.
Xiaomi Finance began testing personal loans in September 2015. The first insurance product was added in June this year.
Xiaomi mentioned in 2015 the development of a user data-based credit scoring system, but it still hasn’t obtained a license for consumer credit scoring operations at that moment. So far only two internet companies, Alibaba’s Ant Financial Services Group and Tencent, have obtained a license and launched their online credit scoring services.
A couple of months ago Xiaomi joined seven Chinese private companies to apply for approval to set up a private bank, according to the announcement released by Hebang, one of the seven approved companies, on July 10th. Tencent and Alibaba’s Ant Financial were in the first batch to get approval to set up private banks. Tencent’s WeBank and Ant Financial’s MyBank, both launched earlier this year, provide online-only banking services.
Xiaomi has also invested some local online finance startups, including the investments in peer-to-peer lending site Jimubox in 2014 and stock trading app Tiger Brokers in August 2015.
Image credit: Xiaomi