Chinese search engine provider Baidu announced the official launch of its online payments service Baidu Wallet.
Baidu Wallet will provide various financial services such as money transfers, payments, and recharges. This is another important Internet payment brand in China following Alibaba's Alipay's wallet and Tencent's WeChat payment service.
To boost its launch, Baidu launched a price-cutting promotional program for the wallet. Under this program, Baidu Wallet will charge a relatively low cooperation fee from its partners. Baidu revealed that Baidu Wallet will be first integrated into the company's own apps, including mobile Baidu, Baidu map, and Baidu group buying. At the same time, Baidu Wallet's super transfer service has cooperated with 129 banks around China, covering the entire country except Tibet. At present, the transfer service is completely commission-free. In addition, Baidu Wallet will support Baidu's financial management platform and users can purchase products on the financial management platform via Baidu Wallet.
Baidu Wallet will issue the first batch of CNY1 billion coupons to users, which can be used to enjoy cash discounts at designated vendors.
Baidu Wallet gained the payment license issued by the People's Bank of China in July 2013. Since then, the team was rapidly expanded under the leadership of Li Mingyuan, vice president of Baidu.
The Baidu service is interesting from a corporate governance and legal perspective because it appears to be a wholly-owned service of Baidu.com, which is publicly listed in the United States. Tencent, another Chinese technology company, is listed in Hong Kong and has its own online payment service. So, in many ways both Baidu and Tencent can be seen as foreign businesses operating in China with variable interest equity entities having Chinese online payment licenses.
This may pose a problem for rival Alibaba, whose chairman Jack Ma separated out the Alipay payment service recently under the harsh criticism from investors like Yahoo. Ma reportedly broke Alipay away from Alibaba because of regulatory issues related to a foreign business owning a Chinese online payment provider. Alibaba tried to list in Hong Kong recently, and was rumored to have been denied the ability to do so because of irregularities concerning its separation of the Alipay business.
Now Alibaba is aimed at a U.S. listing and may face further scrutiny over its corporate governance issues, and now especially since Baidu and Tencent have in-house payment services it may be contentious for Ma to have tried to wrangle the rich Alipay business away from minority investors.