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Chinese smartphone maker Xiaomi is the latest tech company to cross over into financial services by offering an interest bearing mobile wallet.
Xiaomi began public beta testing Tuesday of an online money-market fund that lets users
Xiaomi offers interest bearing mobile wallet
earn interest on money saved in Xiaomi’s wallet app, a spokeswoman said. It marks another sign of Xiaomi’s ambitions to be an Internet company rivaling Alibaba Group and Tencent Holdings, rather than just a hardware maker.
China e-commerce giant Alibaba launched its Yu’e Bao online fund management platform in June 2013, and it became the fourth-largest money market fund in the world at one point last year.
The annual yield for Xiaomi’s fund is currently 6.4%, according to a microblog post by Xiaomi marketing chief Tony Wei. Yu’e Bao’s yield has fallen to 4.5% as of Tuesday, although it was over 6% in its early days. It isn’t clear whether Xiaomi’s higher rate would remain should the company make the program permanent.
Also this week, Facebook added a payment feature to its Messenger app that let users send cash to friends. Such a function had already been offered by Chinese Internet companies like Tencent, with Chinese users early adaptors of mobile payments.
As for Xiaomi’s fund, it is still in beta testing, so there are no guarantees it will be a permanent feature. But it’s an indication of Xiaomi’s direction as it looks beyond smartphone sales. The company has grown into the world’s most valuable startup due to online sales of smartphones with high-end specs and low price tags. Xiaomi executives have long said they are more interested in building a large userbase than in short-term profits from the phones so they can deploy more Internet services.
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