ALIPAY said it already has more than 2.5 million users for its latest mutual fund service only three weeks since it launch. The company, China's largest third-party online payment platform, is based in Hangzhou.

Tianhong Zenglibao monetary market fund has accumulated more than 6.6 billion yuan (US$1.08 billion) through Alipay users' asset management accounts, the payment firm said in a statement today.

As many as 1.6 million payments for online orders on Taobao were made out of mutual fund accounts held by Alipay users.

Alipay's new service raised heated debate as it fully leverage its huge user base and makes the subscription of mutual funds more convenient.

Its main targets are grassroots consumers who don't have a deep understanding of asset management or a
habit of using it.

Industry watchers also urged regulation of the sector during a panel discussion at the Lujiazui Forum over the weekend.

"We encourage innovations from Internet companies and other third party payment firms but we'll also keep a close eye on any potential risk or damage it could bring to individual consumers." said Zhou Jinhuang, vice director of the central bank's payment and settlement division.

According to China Securities Depository and Clearing Co Ltd, there are altogether 44.2 million domestic investors had opened mutual fund accounts by the end of May.

Third-party payment services are still in the early stage as they accounted for less than 1 percent of total non-cash payments in the first quarter of this year, according to Zhou.

But their number of transactions amounted to more than 60 percent of the number handled by banks and other financial institutions.

Wang Yanxiu, director of the Innovation Regulatory Commission at the China Banking Regulatory Commission, also said that relevant authorities are working on rules to better regulate e-banking, adding that they will prioritize consumers' financial security among other concerns.