Meituan-Dianping, China’s largest group deals site, confirmed Monday that it has fully acquired Qiandai, a third-party payment startup. This means that Meituan-Dianping is able to run financial services ranging from mobile payment, bankcard payment to prepaid cards.
The company has not disclosed more details about the deal yet, but one thing is sure: the Chinese unicorn has finally obtained the long-coveted third-party payment license through this case, adding another key asset to its O2O ecosystem.
The move is in line with the recent Second-half era proposition proposed by the company’s founder Wang Xing, who claimed a new period is right around the corner for the company, the O2O industry and the whole nation. For him, deep integration among industries is the only solution for us to live up to the change.
The importance of third-party payment license for O2O companies, whose services encompasses of a wide range of services that generally involve payment at some point, is so obvious. With this case, Meituan-Dianping has removed a hurdle along its way to create a closed business circle for O2O industry.
The Chinese tycoon has once rolled out some tentative efforts to include pre-paid functions in its mobile app and website. However, such a feature steps on the policy line for payment services that needs an official license to accommodate in China. Not surprisingly, the company has received a warning this March from the PBOC (People’s Bank Of China) to remove the feature.
The deal is more significant given that the PBOC announced last month that it’s not going to release new payment licenses to non-bank payment agencies for “a certain period” as it seeks to regulate the fast-expanding payment industry.
While Alipay and WeChat Payment are the existing mobile payment solutions for Meituan-Dianping, Qiandai’s acquisition could reduce Meituan-Dianping’s reliance on them and bring the firm more edge against its rivals. Both Baidu Nuomi and Alibaba’s O2O arm Koubei, the two arch-competitors of Meituan-Dianping, have their own payment solutions, Baidu Pay and Alipay.
Founded in 2008, Qiandai is a mobile payment company that provides comprehensive payment solutions for small and medium-sized enterprises. It is one of the first batch of 27 enterprises to obtain the payment license issued by China’s central government. The firm has received a strategic investment from Haitong Securities, IDG-backed RMB fund Harmony Growth in November 2014.
“The acquisition of third-party payment license will help us to provide faster and safer services to user and merchants. We aim to build a comprehensive platform that opens to banks, card operators and other payment institutions in a bid to construct an O2O ecosystem for facilitating mutual development,” said Mu Rongjun, senior VP of Meituan-Dianping.
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