Suddenly, WeChat and Alipay can no longer deposit money

Recently, Alipay has taken down bank deposit products on its wealth management page for users who do not hold internet deposits.

Just one day later, several Internet financial platforms removed their Internet deposit products from their shelves.

On the 20th, the reporter found that JD Finance and Du Xiaoman platforms had processed Internet deposit products. At the same time, Tencent Wealth Management no longer has the option of bank products in its stable financial management.

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JD Finance and Du Xiaoman remove internet deposit products from shelves

Upon inquiry, the reporter found no internet deposit products on the Du Xiaoman platform. However, the day before, there were still a large number of such products available for purchase on the Du Xiaoman platform.

Du Xiaoman said that it will strictly abide by relevant policies and regulatory requirements, embrace supervision, and adhere to compliant operations. As for the Internet deposit business, the Internet deposit products on the platform have been removed from the shelves. After the products are removed from the shelves, they will only be visible to users who have purchased the products, and users who have purchased related products will not be affected . In the future, the relevant business will be continuously improved according to the requirements of regulatory policies.

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On the JD Finance platform, the reporter clicked on Bank Selection. The product interface currently only showed the Internet deposit product of Beijing Zhongguancun Bank, which has a savings deposit interest rate of 4.3%, a term of 5 years, and dividends paid every 3 months . Although the product has not been taken off the shelves, it has been sold out and can no longer be purchased.

Just the day before, when the reporter logged into the JD Finance platform, Internet deposit products of many banks including Yilian Bank, Blue Ocean Bank and Zhenxing Bank were on sale.

JD Finance platform on the 19th (left) and 20th

It is worth noting that, unlike Ant Group and Du Xiaoman, JD Finance has not opened an entry channel for users who purchase and hold products. On the JD Finance platform, users who hold Internet deposit products are still unable to purchase Internet products.

JD Finance responded that, currently, in response to the regulatory authorities' attention to Internet deposit business, JD Finance APP has stopped adding new Internet deposit products and stopped new users from purchasing related products, and has made prudent and orderly adjustments to existing customers and businesses: related products will only be visible to users who have purchased products, and users who have already purchased related products will not be affected. In the future, JD Finance will pay close attention to relevant regulatory policies and guidelines and implement them conscientiously.

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It is worth mentioning that on the 19th, the reporter did not find any Internet deposit products among the bank products in the stable wealth management on the Tencent Wealth Management platform. On the 20th, the stable wealth management categories on the Tencent Wealth Management platform changed to currency, bond funds, insurance and securities, and there was no longer a category for bank products.

Tencent Wealth Management on the 19th (left) and 20th

Internet deposits are still present on bank official accounts

In fact, the main Internet deposits on Internet financial platforms have always come from private banks and local city commercial banks and rural commercial banks. Undoubtedly, for local banks and private banks that do not have the advantage of offline business outlets, listing Internet deposit products on major Internet financial platforms has earned them enough traffic.

Liao Zhiming, chief analyst of Tianfeng Securities, once analyzed WeBank’s smart deposits and said that although WeBank has no offline operating outlets but has access to Tencent’s huge traffic, its deposit growth can only be generated by relying on its special product - "Smart Deposit+".

Although WeBank removed its smart deposit service at the end of 2018, this model has been imitated by many banks that have no traffic and no offline advantages.

Sun Tianqi, director of the Financial Stability Bureau of the People's Bank of China, pointed out in an article titled "Online Platform Deposits: A Product Case Study of Digital Finance and Financial Supervision" that the Internet platform model provides customers with a deposit purchase interface, which is essentially a deposit marketing behavior. Regulatory requirements require commercial banks to further regulate deposit-taking behavior and not to absorb deposits through third-party intermediaries. Such Internet financial platforms provide information display and purchase interfaces for customers to purchase deposit products, which is essentially a marketing behavior.

The reporter noticed that although Internet financial platforms have removed Internet deposit products from major banks, Internet deposits can still be seen on official channels such as the WeChat public accounts of many banks.

In fact, with the rise of Internet deposits, local corporate banks have broken through geographical restrictions and their deposit business has expanded to the whole country. Small and medium-sized banks have absorbed Internet deposits, breaking through the spatial limitations of traditional channels. From the perspective of funding sources, they have become national banks, which deviates from their market positioning of being based in the local area and serving small and medium-sized enterprises.

The unique attribute of Internet deposits that they are not restricted by geographical location also poses challenges to the liquidity management of small and medium-sized banks.

Sun Tianqi said in the article that Internet platform deposits are a new thing for banks to carry out liability business with the development of Internet finance and platform economy. For this kind of new business model of traditional finance, in-depth research is needed, and the requirements for entry conditions and risk management of the business need to be clarified. The business threshold and business scale limit should be set according to regulatory ratings, operating conditions, capital and risk management capabilities. In particular, it is necessary to clarify which type of banks cannot do this kind of business. At the same time, in view of the new characteristics of the new business model, prudent supervision indicators and relevant rules should be improved, and countermeasures for the abuse of the statutory repayment standard of 500,000 yuan for deposit insurance and the competition of capital prices should be studied. Strictly regulate all kinds of behaviors involving financial products and services on digital platforms such as the Internet and APP. Study the different characteristics and disposal plans of online and offline runs.

In addition, the rise of Internet deposit products is related to their own characteristics of low threshold, high interest rate and strong liquidity, which is not a good thing for banks.

Sun Tianqi pointed out that some high-risk institutions also absorb deposits through Internet platforms, and some of them account for 70% of deposits. These high-risk institutions have weak risk resistance capabilities, and the excessive proportion of Internet platform deposits further increases the instability of their liabilities.

Huang Dazhi, a senior researcher at Suning Financial Research Institute, once told reporters that whether it is smart deposits or other high-cost liability deposits, they are essentially high-interest deposit collection. At present, in the context of promoting financial services to the real economy, banks must lower the loan interest rates for small and micro enterprises. Small and medium-sized banks are the main force in serving the real economy and small and micro enterprises. To reduce the financing interest rates of small and micro enterprises, it is necessary to consider the bank's capital costs. The fundamental purpose of the regulator's suspension of the high-interest deposit collection model of smart deposits is to transmit the cost of banks' liabilities to bank loan interest rates, while also curbing financial risks to a certain extent and curbing malicious competition for deposits among commercial banks.