UPDATE 2-ByteDance's Douyin Pay investigated for alleged rule breach, Caixin reports

Douyin Pay, the online payment service for the Chinese version of TikTok, is under investigation for an alleged rule breach, Chinese financial media outlet Caixin reported on Wednesday, citing sources familiar with the matter. Douyin Pay is suspected of opening payment accounts for financial institutions and other entities engaged in financial businesses, a practice deemed illegal by China's central bank, Caixin said.

Douyin Pay, the online payment service for the Chinese version of TikTok, is under investigation for an alleged rule breach, Chinese financial media outlet Caixin reported on Wednesday, citing sources familiar with the matter.

Douyin Pay is suspected of opening payment accounts for financial institutions and other entities engaged in financial businesses, a practice deemed illegal by China's central bank, Caixin said. ByteDance, owner of Douyin, did not immediately respond to a request for comment.

The rule, in place since 2016, prohibits non-bank payment institutions from opening accounts for financial institutions or other entities engaged in credit, financing, wealth management, guarantees, trusts, or currency exchange businesses. Douyin Pay could face fines of as much as tens of millions of yuan, Caixin said, citing an industry expert.

ByteDance launched Douyin Pay to facilitate e-commerce transactions, competing with other dominant payment options in China like Alipay and WeChat Pay.