Chinese internet company to offer online-only credit service

Chinese internet company Sina, has begun testing an online-only credit payment system.

The service is called Xinyongbao, Chinese for “Credit-Treasure”, and has begun to rollout to select users of Sina’s immensely popular Twitter-like Weibo network for beta testing. The new service will use credits to pay for goods and services online, after which the user will pay for later, similar to credit card bills. Select users will be given 50 Yuan in Xinyongbao credit, and spokesperson for Sina mentioned the credit can be increased if users pay their bills on time.

Sina is looking to target companies like Tencent with their WeChat payment application, and Alibaba’s Alipay mobile wallet and online credit service Yu'ebao. The service will be made available on smartphones and tablets, and will be used for virtual goods such as games, game add-ons, videos, and e-books.

The new service is similar to Dwolla-Credit and Mobicred as it is a payment option in itself, and not linked to a credit or debit card. As opposed to Dwolla and Mobicred, Xinyongbao will not require users to link a bank account to their service, and will rely on customer loyalty, by offering incentives and increased credit balances to users who pay on time.

Sina’s Weibo has over 536 million users, 60 million of them on smartphones and tablets. According to a Sina spokesperson Xinyongbao and Weibo should prove to be good advertising tools for businesses who adopt the payment service due to the amount of already registered users.