The first of six private banks in China officially launched this week, following the Chinese government’s new pilot program to expand private banking institutions in the country.
Tencent Holdings unveiled WeBank, an online only private bank with a focus on mobile. The bank is named after Tencent’s hugely successful messaging service WeChat.
WeBank will be fully online, and will only accept loans under ¥1 million (£105,000). State-run banks in China tend to only deal with large businesses, meaning WeBank could become popular with small businesses for loans.
Tencent’s WeBank page currently has a QR code, showing some of the features coming to the online bank. Users will be able to sign up and pay through mobile, and Tencent will manage customer portfolios and set its own interest rates.
E-commerce giant Alibaba has also been accepted into the private bank pilot program, under one of its subsidiaries. The e-commerce giant is more experienced than Tencent when it comes to handling payments, already operating payment service AliPay.
Banking in China is handled by multiple entities; Alibaba, Tencent and JD all offer short-term loans already. Now that China allows private banks, tech companies will undoubtedly start to work on their own services.
Private banking will move out of the pilot stage in spring and the other five companies should unveil their own products shortly.