Chinese third-party Internet payment company Alipay.com is expanding its footprint in the Chinese financial market by providing services to 37 mutual funds in China.
Shi Zhiyu, a spokesperson from Alibaba Group, told local media that Alipay.com has reached agreements with 37 funds and has submitted a related file to the China Securities Regulatory Commission. The spokesperson said that the specific cooperating model will be varied. However, in most circumstances, Alipay.com will offer payment services on the official websites of these funds.
Prior to this, Alibaba launched a new investment product named Yu'ebao on its Alipay platform, which allows users to buy money market funds. A money market fund is a mutual fund that invests in short-term debt securities and government bonds, featuring lower risk than other financial products. The first money market fund available on Alipay is Zenglibao, which is a product of Tianjin-based Tianhong Asset Management Company. Launched in June 2013, this service reportedly attracted CNY5.7 billion from 2.5 million users by the end of that month.
Based on the product description of Yu'ebao, which means leftover treasure in Chinese, the users of Alipay can transact their idle funds into Yu'ebao to make investments, with a minimum investment of CNY1 and no maximum limit. Users can also redeem the money at any time.
Latest statistics showed that Yu'ebao's average annual compound rate of return for seven-day periods was 4.48%, which was much higher than the current deposit rate of 0.35%.