ByteDance seeks to launch payments platform to take on Ant Group

China’s digital payments industry is potentially facing its next major shakeup.

ByteDance, the Beijing-based tech giant which owns social media apps like TikTok and its Chinese equivalent Douyin, has been developing a financial service and online payment platform modeled after Alibaba’s Ant Group, with preparations nearing an advanced stage, local news outlet Tech Planet recently reported.

Photo credit: ByteDance

A former ByteDance employee with knowledge of the firm’s plans told Tech Planet, on condition of anonymity, that development of the three core components of the platform, including payment processing, insurance selling, and securities trading, has been completed.

If the service is successfully launched, it is likely to pose a challenge to the duopoly held on the mobile payment market by Alibaba via its affiliate Ant Group and Tencent’s WeChat Pay, even as their market power faces growing scrutiny from regulators.

A continuous pursuit

ByteDance’s foray into financial services could trace back to six years ago, in 2015, when a team was carved out of its finance department to work on a stock market tracking app that was billed as a complement to its news aggregator and sharing platform Toutiao.

Recruitment notices posted that year by Toutiao touted open positions for interested financial analysts and experts in areas such as risk and consumer finance.

The app was eventually launched in 2017 under the name Ximei Gupiao, meaning rare magnesium stocks in Chinese. It claimed to be a stock analysis tool that uses machine learning and big data to capture and alert traders about price signals and market-moving news.

But the app attracted few users, outshined by more professional financial information services like iFind and a rival stock quotes and news app developed by Tencent.

In early 2018, ByteDance turned to Gu Wendong, the former vice president of the big data innovation center at Chinese fintech giant CreditEase, to rejig its efforts.

Gu was chosen for two reasons. First, his expertise in the so-called “recommendation systems” that have been implemented by many services—including ByteDance in its news aggregator app—from Amazon, Netflix to YouTube, to use an algorithm to recommend anything from something to read, to watch, or to buy to their customers. Gu has been leading an online discussion group dubbed “ResysChina” that dedicates to sharing updates and promoting the use of recommendation technologies in China.

Second, he was then the vice president at a leading local fintech startup leading its big data innovation initiative, giving him the relevant background in the fintech sector.

Gu came with a vision to tap the existing machine learning recommendation technology used in Toutiao, which he has described as one of the world’s best, to promote and power the finance service he’s championing. And ByteDance did throw its full financial weight and manpower behind him, according to a former employee who worked under Gu. The team was formalized as a branch of ByteDance, with nearly 300 workers being allocated to work on financial-related business in a new office at the heart of Beijing’s busy commercial district, Wangfujing.