Alipay, China’s largest third-party payment platform, has introduced a new funding service, called "Yu’ebao". The service gives Alipay’s near-800 million users the option to directly invest with the private TIANHONG Fund, using spare cash from Alipay accounts.
Alipay, which is China’s version of Paypal says it has a large amount of spare cash resting in the accounts of hundreds of millions of Taobao users. The number of people investing in the fund, has exceeded 1.5 million since its trial launch on June the 13. The annual earnings rate for investors in the fund is around three to four percent.
That’s compared to normal bank interest rates of 0.325 percent. The minimum threshold for fund investment is set at one Yuan, that’s far lower than normal investment thresholds. Users can redeem funds at any time, and the capital can be used directly for online payments or transferred without redemption.
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