Alibaba and Tencent are engaged in a struggle to control the internet, both in China and possibly worldwide. Their latest battlefield will apparently be financial services, as each have won approvals from Chinese authorities to set up privately owned banks.
On Monday (Sept. 30), the China Banking Regulatory Commission approved the parent company of Alipay, the electronic payment unit that processes majority of transactions on the massive Aliababa e-commerce network. This follows on the heels of a similar approval Tencent won from Chinese regulators in July.
Alibaba said on its website last week that Yu’e Bao, the firm’s investment fund, now allows investors to automatically transfer money between their bank accounts and Yu’e Bao accounts. Yu’e Bao accounts can now be set to automatically receive a portion of a monthly salary deposit or automatically pay monthly bills. Tencent, ever the competitor, launched Licaitong, a money-market fund similar to Yu’e Bao and is using its WeChat smartphone messaging application as a platform to promote and offer financial services, reports The Wall Street Journal.
How far either firm can go will depend heavily on the occasionally capricious Chinese regulators.