Chinese services platform Meituan Dianping has unveiled a credit payment feature named Maidan, following its technology peers which have launched similar services.
Why it matters: Meituan is deepening its fintech offerings, an important component for platform’s core service businesses which require payment transactions.
- With this push, the Chinese food delivery giant is competing head-on with Alipay, JD.com, and Tencent, which also have their own virtual credit payment tools.
- The new feature will bring additional revenue through fees charged for installment payment services and late payments.
Details: The new financial service offers users credit to delay payments by a month, and interest-free loans for up to 38 days.
- The credit payment option now supports all the major apps within the company’s ecosystem including Dianping, ride hailing service Meituan Dache, and grocery delivery service Meituan Maicai.
- Meituan users qualify for credit lines from RMB 300 (around $43) to RMB 1,500 according to credit and spending histories on the app.
- A select group of merchants and users have been testing the credit payment feature since September.
Context: The Hong Kong-listed firm reported RMB 1.33 billion ($191 million) in profits in the third quarter of 2019, a second consecutive quarterly profit since its September 2018 listing.
- Companies that run online payment services in China must obtain a license, which the firm nabbed through its acquisition of a third-party payment startup Qiandai in 2016.
- In addition to the company’s homegrown payment channel Meituan Pay, the app also supports popular payment tools Alipay, WeChat Pay, and Apple Pay.
- The app works with local banks such as Bank of Shanghai, Bank of Guangzhou and Bank of Qingdao to issue joint co-branded credit cards. It also offers loan services through its micro-credit subsidiary Meituan Sankuai Micro-loan.
- Which Tencent only launched its Fenfu credit payment service in late 2019, JD.com launched Baitiao in 2014 and Alipay debuted Huabei in 2015.