China UnionPay, the leading financial services provider in China, signed a collaboration agreement with JD Finance, a subsidiary of China’s leading e-commerce platform, JD.com, on January 4 2017. The partnership formally acknowledged JD Finance’s Chinabank Payments as its acquiring affiliate and JD.com as an affiliate of China UnionPay’s acquirer network. This partnership aims to enlarge JD.com’s internet presence in the payment segment.
The two organizations will cooperate in offline and online payments. The partnership will also allow JD Finance and UnionPay to innovate new payment innovations, offer financial services in rural areas, and issue co-branded cards with Chinese commercial banks, where 16 banks have joined the program. As the agreement indicates, JD financial and UnionPay will launch payment innovations in collaboration with other financial institutions and enhance risk control to prevent fraud via the application of big data.
Since JD financial’s risk control system is one of the best systems in the industry, the two companies will collaborate in other areas, including risk analysis and control, big data analysis, and opportunities in global markets. Leveraging JD.com’s wide range of customer and transaction, JD financial has established advanced credit and risk management systems. When this model becomes integrated with China UnionPay’s transaction management platforms, financing and payments will become easier, safer, and more convenient for both businesses and customers. Additionally, customers will get a more diversified experience through lowered transaction costs and improved service efficiency.
Over 120 third-party companies that can interact and shift between various banking systems have joined the UnionPay network, including 99Bill, managed by Wanda Group, a real estate conglomerate, and Tenpay, established by Tencent Holdings Ltd. However, the long list of UnionPay affiliates does not include Alipay, which Alibaba Group Holding Ltd launched in 2004. Alipay occupies over 50% of the online payments market in China. Meanwhile, as Alipay asserts, the possibility of the two payment giants working together in the future is not yet ruled out, even though discussions with UnionPay started some time ago.
Founded in 1998, JD.com, formerly called 360buy, is a leading e-commerce organization in China and the country’s largest online organization by revenue. JD.com sets its high standard for online shopping via its commitment to authenticity, quality, and diverse product offering, from fresh foods and clothing to cosmetics and electronics. With its vast network across the country, the company offers competitive same- and next-day delivery services, serving more than 1 billion customers- its services levels and speeds are unmatched globally.
Chinse consumers acclaim JD.com for selling quality products. JD.com employs a stringent zero-tolerance approach to ensure it delivers only high-quality and genuine products to its clients. The organization uses direct sales as its business model, which enables it to control the entire supply chain. It combines this business model with a marketplace that restricts the number of sellers to maintain quality oversight.
JD.com is an ideal partner for local and international brands that want to reach Chinese customers online. It offers a wide array of services to help businesses reach Chinese clients, including customer targeting, marketing, and big data analytics, logistics, and financing. As a technology-driven organization, JD.com creates dependable and scalable platforms that bring value to clients and partners in segments such as e-commerce, internet finance, logistics, innovative technology, and cloud computing.
In 2013, JD.com established JD Finance- the company’s financial technology department. The department allows businesses and individuals to access financial services quickly, easily, and conveniently. Exploiting JD.com’s e-commerce expertise, proprietary data resources, and industry’s best risk control systems, JD Finance provides sophisticated monetary solutions in various fields, including asset management, consumer credit, payment solutions, supply chain financing, and crowdfunding. In November 2018, JD.com announced its plans of reorganizing JD Finance to ensure it acquires complete domestic ownership, which would help it apply for licenses that have this requirement.