Bilibili acquires major stake in Yoyipay to obtain the e-payment license

November 22, 2021 10:35 pm

Chinese video streaming platform Bilibili has bought a 65.5% stake in Zhejiang Yongyi Electronic Payment Co., Ltd (Yoyipay) for about 118 million yuan ($18.5 million), according to Ningbo Public Resource Trading Center.

The two sellers in an auction were Yuyao China Plastic City Logistics Co., Ltd and Yuyao China Plastic City Group, whose stakes in Yoyipay previously remained at 56.5% and 9%, respectively. The winning bid offered by Bilibili is equal to the reserve price provided by the sellers.

Yoyipay was founded in July 2011, with a registered capital of 100 million yuan. It gained a Payment Business Permit in 2012 from People’s Bank of China, the country’s central bank.

In China, to provide payment services, a non-financial institution need to obtain a Payment Business Permit. Payment institutions are subject to the supervision of People’s Bank of China.

The purchase in the auction is very likely to lower Bilibili’s cost in transactions with third-party payment institutions. According to its previous financial reports, the annual service fee Bilibili delivered to third-party payment institutions in 2019, 2020, and 2021 reached respectively to 10.8 million yuan, 26.8 million yuan, and 42 million yuan.

Besides lowering the cost, an online payment license is likely to help Bilibili gain financial resources directly from users and negotiate its days payable outstanding (DPO) with vendors. DPO indicates the average time that a company takes to pay its bills and invoices to its suppliers, vendors, or financiers.

Bilibili is following other media platforms’ steps. Last September, Douyin’s owner ByteDance acquired Wuhan Hezhong Yibao Technology Co, according to South China Morning Post. Last November, short video platform Kuaishou acquired online payment firm Easylink Payment Co. Ltd for about $45.6 million.

Due to high content cost and excessive business expansion, Bilbili booked a wider net loss for the third quarter last Wednesday.