"The set-up of Douyin Pay is to supplement the existing
major payment options, and to ultimately enhance user experience on
Douyin," Douyin said in a statement.
Users of Douyin, which accumulated 600 million daily active
users, previously could use Ant Group's Alipay and Tencent's WeChat Pay, the
country's two ubiquitous third-party mobile payment channels, to buy virtual
gifts for livestreamers or items from shops on the platform.
ByteDance founder and CEO Zhang Yiming built up the
company's payment capability in China by acquiring Wuhan Hezhong Yibao
Technology last year. Hezhong Yibao obtained a third-party payment license from
the central bank in 2014.
ByteDance has been ordered by the outgoing Trump
administration to divest TikTok's US assets on national security concerns.
The company, which denies the allegation, has been in talks
for months with Walmart and Oracle to shift such assets into a new entity.
Douyin is the main revenue generator for ByteDance. It
provides a glimpse of what TikTok could eventually become, as Douyin started
selling merchandise in 2017 and now operates a growing e-commerce operation
where hundreds of millions of users shop on a daily basis.
ByteDance's expansion comes as China's financial regulators
are tightening oversight over financial technology firms, particularly
companies such as Ant Group.
China's third-party payment sector is dominated by Alipay
and WeChat Pay, with the former taking 55.39 percent of the total market in the
second quarter of last year, according to market researcher Analysys. Other
players include JD.com's JD Pay, Baidu Wallet, and Meituan Pay.