“Science and Technology Innovation Board Daily”, April 4 (Reporter Zhang Yangyang) Douyin completed the last puzzle piece of the payment license. On the evening of April 3, Hailian Jinhui announced that it plans to transfer its payment institution (Linkage Advantage E-Commerce Co., Ltd.) to the parent company of Douyin's payment license holder (Wuhan Hezhong Yibao Technology Co., Ltd.). The transaction price is 750 million yuan as a reference transfer consideration plus net assets on the day of delivery. After the transaction is completed, the payment institution will be merged with Hezhong eBao. These transactions and mergers are all subject to approval by the central bank.

After the transaction is completed, Douyin Pay will complete the bank card receipt business license. The relevant person in charge of Douyin Pay said that the transaction was to support offline transaction scenarios such as lifestyle services and provide users and merchants within the Douyin system with a more convenient payment and service experience.

Wang Pengbo, chief analyst of the financial industry at Broadcom Consulting, analyzed to the “Science and Technology Innovation Board Daily” reporter that according to the relevant provisions of the “Barcode Payment Business Specification (Trial)”, non-bank payment institutions that provide customers with payment services based on bar code technology should obtain an online payment business license; payment institutions that provide bar code payment receipt services to physical authorized merchants and online authorized merchants should obtain separate bank card receipt business licenses and online payment business licenses.

Douyin's parent company ByteDance obtained a payment license through an external acquisition in August 2020.

At the time, ByteDance took over 100% of the shares of Wuhan Hezhong Yibao Technology Co., Ltd., the operator of “United Pay”, from Zhongfa Industrial (Group) Co., Ltd., thus obtaining an Internet payment license. This is also a common method for most internet companies to get involved in the payment business.

The following year, Douyin launched its own payment product. In January 2021, Douyin officially launched Douyin Pay on the basis of the original payment methods (WeChat Pay, Alipay).

Since 2020, Douyin has been making efforts in live e-commerce and is trying to establish a closed loop of transactions. In October 2020, Douyin Live banned external links to third-party e-commerce platforms, and transactions can only be completed in the Douyin store. After the launch of Douyin Pay, Douyin also further improved the closed loop of e-commerce transactions.

According to the “Science and Technology Innovation Board Daily” reporter's daily observations, Douyin will currently use various methods to promote its own payment methods, including preferential relief, shipping insurance, etc.

After Douyin e-commerce became mature, Douyin also focused on other businesses in the ecosystem, and offline local life was an important part. In August 2022, Douyin and Hungry reached a partnership to explore the local lifestyle service scene. Since 2023, Douyin has accelerated its layout in terms of local lifestyle services. In July of last year, Douyin Local Life adjusted its organizational structure. Zhang Lidong, chairman of Douyin Group and head of commercialization, began inquiring more about this business, and heads of various departments made job adjustments; the wine tourism business was also upgraded to a first-level department, parallel to the in-store business.

According to Wang Pengbo, after obtaining offline bank card billing qualifications, Douyin Pay can further expand offline payment services and cooperate with lifestyle services and other businesses. While filling the closed loop of commerce, it can also reduce channel costs, and further strengthen control over offline merchants. As mentioned earlier, payments have become a commercial gateway and financial and social infrastructure. It has both data value and marketing entry. Douyin can also use this to open up merchant credit networks, and then replicate loan business after better grasping merchant operating data through payments.

“Another issue to consider is that it must be approved by the central bank.” Wang Pengbo stressed that there are two thresholds that need to be overcome. First, according to the “Regulations on the Supervision and Administration of Non-bank Payment Institutions”, the same payment institution cannot have two payment licenses or control two payment institutions; second, rules on how to specifically classify accounts and operating licenses will soon be introduced.