Tencent Holdings is a huge investment holding company that has recently ventured into financing through WeBank. (Photo : Reuters)
Tencent Holdings Ltd., China's online game giant and operator of the massively popular mobile app WeChat, launched the trial period for its online banking entity, WeBank, on Sunday.
Tencent, which holds a 30-percent share in the new finance company, is acting in partnership with Shenzhen Baiyeyuan Investment Co. and Shenzhen Liye Group. According to its website, WeBank's registered capital currently sits at 3 billion yuan.
Premier Li Keqiang participated in a launch event nine days earlier, at which he dispensed WeBank's first-ever small loan to a truck driver with the mere press of a button. Notably, Xu Jun, who is employed by an online trucking platform called Huochebang, did not need to engage in the typical practice of attending an offline bank facility to receive his 35,000-yuan ($5,630) loan.
During the trial phase, only employees of WeBank's shareholders, including Tencent, can open accounts and deposit money with the bank, which does not operate any brick-and-mortar branches. An unnamed source told the Wall Street Journal that the trial is expected to last for around four months. However, the scheduled public opening date remains unclear, as the Journal's source mentioned May, while the Global Times indicated March or April.
The online bank's launch, which will eventually be followed by a competitor from Alibaba Group Holding, forms part of an overall change in China's banking and financial sector. On the credit front, the People's Bank of China (PBC) is seeking to establish official credit records for the 850 million customers in its credit reporting system.
Meanwhile, direct banking, whereby consumers can access remote or phone services, is also at the forefront of the sector. As of Thursday, 15 Chinese banks were either launching direct banking services or in the process of finalizing them.
Zeng Linghua, chief analyst with Howbuy, told the Global Times this week: "With the development of technology, it is possible that we may not have to stick with offline operations to open an account or use other services.
At some point in the future, Zeng expects that China's citizens will no longer rely on offline banking.
