Tencent incubates new credit payment product to take on Ant Financial’s Huabei

China’s internet giant Tencent is developing a payment product called Fenfu, which has similar functionality to a credit card, and is expected to go live within WeChat Pay in the fourth quarter of this year, according to local Chinese media outlet Xinliu Caijing.

Currently, WeChat Pay, which has more than 800 million users, only bundles with its users’ debit and credit cards issued by regular banks. On the other hand, Ant Financial’s Alipay and JD.com’s payment platforms not only enable payments via bank cards, but also have their own virtual credit payment tools called Huabei and Baitiao respectively.

The new Fenfu tool will allow users who cannot get a credit card from a bank to have a virtual one via WeChat. In addition, it will grant loans which can be interest-free for about one month, plus other micro-credits options and long-term financial services. The new payment platform could bring Tencent additional revenues by charging users service instalment and late payment fees.

Tencent said its fintech and business services revenues were 22.9 billion yuan (US$3.2 billion) in the second quarter of this year, up 37 per cent year-on-year. This segment grew faster than its gaming, online advertisement, and digital content businesses.

By the end of 2018, outstanding loans on JD’s Baitiao amounted to 34.4 billion yuan, while by the end of the first half of 2017, outstanding loans on Huabei reached 99.2 billion yuan, according to Xinliu Caijing.

Tencent did not respond to KrASIA‘s request for comment.