China’s XTransfer Expands From Payments To Wealth Management, Lending

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SHANGHAI (Reuters) – XTransfer, which enables cross-border payments for small businesses in China, said it is moving into wealth management and lending to customers not served by traditional banking.

The fintech company’s founder and CEO Bill Deng said XTransfer — which competes in China with PayPal and PingPong — is starting to offer short-term investment products to small Chinese exporters with temporary cash in their accounts.

Such exporters are paid by foreign buyers, but do not have to pay suppliers immediately, allowing them to generate returns with this extra cash, Deng, who previously worked at Alibaba’s fintech affiliate Ant Group, told Reuters.

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The five-year XTransfer also plans to use data generated through cross-border transactions to provide loans to small and medium-sized enterprises (SMEs) later this year, in partnership with banks.

Without adequate data, SMEs are shunned by Chinese lenders.

Ant also initially started offering payment services before expanding to other financial companies.

XTransfer, which counts China Merchants Venture and Gaorong Capital as investors, has avoided taking on Ant by focusing on cross-border payments and small businesses.

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“We want to be a cross-border version of Alipay that connects buyers and sellers,” Deng said, referring to Ant’s hugely popular payment app.

XTransfer’s expansion comes as Beijing has eased crackdowns on the tech sector and encouraged support for SMEs in an economy hit by the COVID-19 pandemic.

“The central government and the People’s Bank of China hope financial services can be expanded to support SMEs,” Deng said, adding XTransfer will also help small exporters become more resilient through digital transformation.

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Foreign payments to small Chinese exporters rose 15.3% in the first half from a year ago, despite severe COVID outbreaks in the second quarter, reflecting the resilience of Chinese SMEs, XTransfer said in a recent report.

(Reporting by Shanghai Newsroom; editing by Alexander Smith)

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