Will Pinduoduo's next imagination be logistics?

The 10 billion subsidy will help you save money, buy more groceries to help you deliver food, and more wallets will help you check out.

36 Krypton learned that Pinduoduo has launched its third-party payment product “Duoduo Wallet” on the app. This function is located at the bottom of the order process. After entering, click “Open for Free” and enter your name and ID information to bind to a bank card.

Unlike the process of entering a bank card number encountered by most apps in the process of binding the payment, after clicking on the bound bank card in the Duoduo wallet, if you have an app bound to the bank, the Pinduoduo back office can directly link to complete the “quick payment” contract without having to manually enter the bank card number and identity information. After completing the binding, users can see the single transaction limit and daily limit in the “Duoduo Wallet” in the back office.

Third-party payments are no longer a secret war. Especially for e-commerce platforms with a large amount of transaction data, payment is an essential step that can help them complete the closed loop of business. However, since 2017, third-party payments will no longer be allowed to be directly connected to banks, and clearing services will be carried out through a unified online platform. This also means that the issuance of third party payment licenses has been suspended, and companies with payment licenses have become “incumbents.”

The unlicensed giants have all chosen the same path in obtaining qualifications — buying licensed companies. All three companies, JD, Meituan, and Xiaomi, have obtained payment licenses through acquisitions.

Of course, Pinduoduo is no exception. Especially after receiving many “secondary liquidation” reports before, Pinduoduo finally “bagged” its payment license in early 2020.

According to data from Tianyancha, Shanghai Yiyi Information Technology Co., Ltd. obtained 50.01% of the shares of Shanghai Paylink Information Service Co., Ltd. (hereinafter referred to as PayPay) in January of this year, officially becoming its largest shareholder, and the actual controller of the company is Chen Lei, the current CEO of Pinduoduo. PayPay Connect, Ant's Alipay, and Tencent's Tenpay were among the first companies to obtain a third-party payment license in 2011.

In terms of payment channels, users have the right to choose, but the giants clearly prefer to keep transaction data in their own systems. Meituan's collapse of the Alipay channel for some users is the best example. As of Q3 2020, Pinduoduo's GMV reached 1457.6 billion yuan and annual active users reached 730 million within 12 months. After having a user base, Pinduoduo naturally did not want to give up the opportunity to trade in a closed loop.

Currently, tripartite payments follow the distribution mechanism of UnionPay, and the industry with the highest channel fees is 6/1000. According to Pinduoduo's 2019 annual report, Pinduoduo purchased services including payment processing, advertising, and cloud services from Tencent during the three-year period of 2017-2019, for a total amount of 516 million yuan, 1,266 million yuan, and 2,298 million yuan, respectively.

As early as a few months ago, a person close to Pinduoduo revealed to 36Krypton that the “Duoduo Wallet” business is linked to many innovative businesses. During the closed beta, it only supports product payments on the Pinduoduo App, which is mostly used by internal employees.

Currently, on the app side, all Pinduoduo products can be paid through the “Duoduo Wallet” at the time of payment, including the 10 billion subsidy and Duoduo grocery shopping launched earlier.

After owning a payment license, it's only a matter of time before third-party payments go online in e-commerce to close the transaction loop. After owning a payment channel, will Pinduoduo's next imagination be logistics?