This morning, payment institution Huarui Fuda announced via its official WeChat public account the termination of its prepaid card business. This comes just one year after the People's Bank of China (PBOC) approved Kuaishou's acquisition of Huarui Fuda.

In November last year, the PBOC issued an administrative license approval, agreeing to change the major shareholder of Beijing Huarui Fuda Technology Co., Ltd. from Shenzhen Shaofu E-commerce Co., Ltd. to Chengdu Suiyi Culture Communication Co., Ltd. The actual controllers of Huarui Fuda are Yin Xin and Yang Yuanxi.

Who is Chengdu Suiyi? The company name itself reveals little, but the names Yin Xin and Yang Yuanxi may ring a bell. Yin Xin, a graduate of Northeastern University, was previously the legal representative of Guangzhou Danmu Network Technology Co., Ltd. and is currently a supervisor at the same company. He is also a co-founder and legal representative of Beijing Kuaishou Technology Co., Ltd. Yang Yuanxi is another co-founder of Kuaishou and the legal representative of Beijing Dajia Internet Information Technology Co., Ltd.

Indeed, both are founding members of Kuaishou. The contact information listed in Chengdu Suiyi’s business filings also leads to Kuaishou’s corporate email.

Why did Kuaishou acquire a prepaid card license—and a regional one at that, limited to operations in Beijing? This seemed mismatched with Kuaishou’s business model, prompting skepticism from industry insiders at the time.

A year later, instead of expanding Huarui Fuda’s prepaid card operations, Kuaishou has abruptly terminated the business. This move is even more perplexing. Was it a frivolous acquisition? Unlikely. Given Kuaishou’s scale and talent pool, such a hasty decision seems improbable. The company clearly understands which types of licenses align with its business.

Years ago, Kuaishou began engaging with payment institutions and even applied for the "LaoTie Pay" trademark. Rumors once swirled about its potential acquisition of Guangdong-based Yilian Pay, though the deal never materialized. Still, it’s evident that Kuaishou has deep insights into the payment industry.

So, why terminate a license just one year after acquiring it?

Observant readers may note that the announcement only mentions terminating the prepaid card business—not canceling the payment license. Past termination notices from payment institutions typically included mentions of PBOC approval for license cancellation.

More crucially, most payment institutions set deadlines for business termination, signaling urgency to wrap up operations. Huarui Fuda’s notice, however, imposes no such deadline—suggesting no rush.

Reliable sources indicate that Kuaishou is in talks with a "troubled payment institution," possibly seeking to acquire its license by resolving its debt obligations.

There is precedent for this. In December 2015, Chuanhua Payment Co., Ltd. and its parent company assisted local authorities in resolving the debt risks of Zhejiang Yishi Enterprise Management Services Co., Ltd. The PBOC initially withheld approval but later granted it after Zhejiang Yishi’s risks were largely resolved.

Considering Huarui Fuda’s termination of prepaid card services, Kuaishou’s new payment license may involve expanding Huarui Fuda’s scope to include online payment services—specifically, Category I stored-value account operations.

With this in mind, the logic behind Kuaishou’s moves becomes much clearer.