Chinese Conglomerate Huawei Gains Mobile Payments License By Buying Xunlian

Chinese behemoth Huawei Technologies has reportedly landed a mobile payments license in China after buying Xunlian Zhifu Network. Huawei has previously used UnionPay’s mobile payment service.

The Huawei Pay app, launched in 2016, has allowed Huawei phone owners to pay for goods online and in brick-and-mortar stores.

That app, however, is based on near-field communication, a technology that is not widely used in China, KrAsia reported. Zhang Yu, an analyst with iResearch, said, “It is necessary for Huawei to hold a payment license since the company wants to provide more payment and other financial services.”

In theory, that brings Huawei into competition with  Ant Group’s Alipay and Tencent Holdings’ WeChat Pay. Taken together, the two account for about 98 percent of the country’s mobile payments market.

With a payments license, Zhang said, Huawei won’t challenge those powerhouse apps. That’s because Huawei will still promote its mobile payment services primarily within its own ecosystem, he said.

“Huawei made this acquisition with the goal of offering a wider range of secure, easy-to-use smart services,” a company spokesperson told KrASIA.

The company bought Xunlian from Shanghai’s Wo Rui Ou Information Technology Co., China Securities Journal reported on Sunday (March28).

Shenzhen-based Huawei has come under suspicion due to security concerns. The U.S. has pressured the European Union to be cautious of Huawei, due to fears that the company could use its equipment to spy on other nations. Huawei, a competitor of Nokia and Ericsson, has repeatedly denied that it performs any clandestine operations.

Guidelines from the EU, issued in 2020, allow for countries to restrict or exclude “high-risk” 5G providers from important parts of their telecom networks. This meant that 5G provider Huawei could be affected.

These guidelines warn about security interference from a third country as well as the dangers of relying on only one vendor.