For Chinese internet platforms, owning a payment license has shifted from an optional extra to a strategic imperative — the cornerstone for building a sustainable, closed-loop business ecosystem.
Photo from Jiemian News
by ZHANG Xiaoyun
China's internet giants are racing to secure third-party payment licenses once considered a luxury. Xiaohongshu became the latest entrant, after acquiring Oriental Electronic Payment Co., via its subsidiary Ningzhi Information Technology (Shanghai). The move, confirmed in corporate filings this month, has sparked debate over how social and e-commerce platforms are transforming into financial ecosystems.
The trend is accelerating. In late October, Trip.com's affiliate Tongcheng Travel acquired Hainan-based NewPay, the island's only full-license payment institution. The acquisition followed similar deals by 58.com, Douyin, and Kuaishou, while Bilibili's attempt to obtain a license failed after regulators rejected its application.
Xiaohongshu's purchase shows both ambition and timing. Corporate records show it invested over 200 million yuan — including capital injections — to take full control of Oriental Payment, which holds a "Type I stored-value account" license valid until May 2026. The permit covers e-commerce payments, membership top-ups, and bill payments across China.
The acquisition allows Xiaohongshu to integrate payment data with its e-commerce ecosystem — worth about 400 billion yuan in GMV in 2024, potentially saving over 200 million yuan in annual fees previously paid to third-party processors. More crucially, it enables a closed data loop connecting product discovery, transaction, and payment.
However, Oriental Payment's business is under strain. The company posted revenue of just 3.76 million yuan in the first half of 2025, with a net loss exceeding 5 million yuan. The license also faces a renewal review within six months of its 2026 expiry — a process complicated by previous compliance issues.
WANG Pengbo, an analyst at BoTong Consulting, told Jiemian News that Xiaohongshu must tighten anti–money laundering controls, strengthen risk management, and ensure financial independence to avoid triggering regulatory scrutiny.
58.com paid just 23.9 million yuan for 70% of Shenya Yunding Payment, also known as Elion Pay, through court auctions, a bargain compared to peers but one laden with risk — the firm’s license has been suspended for two years pending compliance renewal.
Trip.com’s Tongcheng Travel took a more strategic path, paying 300 million yuan for Xinsheng Payment, also known as NewPay, a digital yuan pilot entity, to support its cross-border tourism expansion in Hainan.
Bilibili, however, saw its effort collapse after its main operating arm, Shanghai Kuanyu Digital Technology, failed to meet profitability requirements for license ownership. Regulators denied its 2021 application to buy Ningbo-based Yongyi Payment, citing sustained losses.
Unlike newcomers, Douyin and Kuaishou have long built internal payment arms. Douyin is consolidating its network after spending nearly 1.4 billion yuan to acquire Union Mobile Finance from HyUnion Holdings, adding offline payment capability that complements its existing Hezhong Yibao license. It also boosted the capital of Douyin Pay twentyfold to 3.15 billion yuan this year.
Kuaishou, meanwhile, took a different route — acquiring Huarui Fuda Payment in 2024, then swiftly terminating its prepaid card business. Market sources say it may soon acquire another troubled payment firm via debt assumption, a method previously approved by regulators in similar restructurings.
According to the People's Bank of China, 107 payment licenses have been revoked as of October 2025, leaving only 164 valid institutions — down by more than a third from the peak. Since new licenses are no longer issued, buying existing ones remains the only lawful route.
Major players are responding with large capital increases to meet new compliance standards: Tenpay raised its capital to 22.3 billion yuan in June, while others like China Bank Payment and Yinsheng Payment have also expanded their balance sheets.
For consumers, the wave promises more seamless in-app payments, but tighter scrutiny over data use and anti–money laundering will follow. As LOU Feipeng, an analyst from Postal Savings Bank of China, noted, platforms must "build payment ecosystems without breaching regulatory red lines."
