Peak Fintech Group Inc (OTCMKTS: PKKFF), the Fintech service provider for the commercial lending sector in China, has recently announced the acquisition of a minority stake in Rongbang Technology Ltd. The latter is a subsidiary of China UnionPay.
What’s the deal?
The company had signed an agreement with Rongbang earlier in the year. This enabled Peak Fintech Group to use the network of China UnionPay for providing services like payment settlement and fund transfer. China UnionPay lets Peak use its Lending Hub ecosystem. After that, in May 2021, Peak initiated a pilot project with a certain number of clients. The company had connected with the UnionPay network to implement the services. In May, Peak tested its services using live transactions and later made them available to the members of its ecosystem at a larger scale.
Booming activities in June
In June, the activities boomed, and the number of payment settlements too picked up. There were more than 1,200 transactions in June. Pertaining to the strong debut, the leadership at UnionPay and Rongbang. The executives then followed up with Peak’s head office based out of Wuxi, after which the company was offered a minority stake in Rongbang. The three entities said that this was a great collab amongst them.
Peak has invested a sum of 2.5M RMB, or about CAD$500,000, to acquire Rongbang’s stake. The acquisition is less than 1%. Peak said that this is a strategic business development and marketing investment different from a regular traditional minority investment in any given private firm. Earlier, the company had spent a considerable amount of money on promotional initiatives and marketing, with no return. The CEO of the company, Johnson Joseph, said that the benefit of this stake is much higher than the marketing investment.