Reports suggest Didi is in talks for acquisition of payment firm 19Pay for RMB4.3 billion RMB (US$622 million). The news that was first speculated by payment news website Paynews states the deal is expected to complete in July or August this year. However, Didi has neither confirmed nor denied the rumor.
This does not come off as a surprise considering how Chinese Internet giants are pushing their way into the financial sector. It clearly indicates Didi’s inclination towards online payment. A spokesperson was quoted saying,
Mobility covers a rich diversity of payment scenarios. Didi has kept extensive dialogue with partners in this industry. We continue to focus on our core transportation business and do not have plans to enter the payment business.
The source familiar with the matter mentioned, prior to Didi, LeEco was mulling over the acquisition of 19Pay but both the companies could not agree on the transaction amount.
19Pay offers e-commerce payment services and domestic telecom integration. It obtained third-party payment license in mid-2012, nearly within two years of its incorporation. Later in 2013, Gaoyang Jiexun, the company which stemmed off 19Pay, was taken over by GoHigh Data Networks. It boasts of an annual turnover of over 30 billion RMB.
Didi already supports two mainstream third-party payment firms, WeChat and AliPay. This transaction will probably lead it to add a payment option of its own but it doesn’t seem to take a halt there.
The Chinese ride-hailing firm’s aim behind the acquisition is quite subtle, to obtain its own payment license, which suggests overseeing and operating the business of 19Pay. However, the source revealed the company will not witness major layoffs in the near future. The team would be relocating to work for GoHigh Data Networks.
With a rise in such deals, the number of independent payment processors is declining, since, the companies with access to users will process payment themselves.