Securities accounts can be opened by app

Tenpay, the payment subsidiary of Chinese Internet firm Tencent, will allow China's retail investors to open securities accounts and trade stocks on its mobile application, the company announced on Friday.

The arrangement will mean Chinese securities brokerages that agree to sign up on Tencent's securities platform can open trading accounts for individuals by using facial recognition technology, thus saving investors the trouble of the face-to-face meetings usually required to open accounts.

China Merchants Securities has committed to the scheme, and Tencent said it expects to sign up up to four domestic brokerages when the service is officially launched.

The company didn't announce a timeline for the launch and added that it will make sure the novel identity authentication service comply with existing regulations.

Tencent is among China's largest Internet firms that have waded into the country's largely state-controlled financial sector in recent years, offering everything from money market funds that beat returns on regular banking deposits to consumer credit and insurance products.

The rise of Internet-based financial offerings has also posed regulatory challenges for authorities, which have been largely tolerant of financial innovation in the Internet sector but are also increasingly uneasy with the risks they bring to the country's financial stability.

Tencent is also in a race with Chinese e-commerce giant Alibaba to set up Internet-based lenders and credit scoring services, all designed to target small firms long underserved by the country's big state lenders. Endi