ANT Financial, Alipay’s parent company, invested US$200 million in Kakao Pay, which is a mobile payments platform provided through the Korean messaging app, Kakao. Tencent also already has plans for US expansion.Īlipay has been doing its own set of high-profile global expansions. Key context: Last May, authorities ordered Tencent to set up a financial holding company to house all of its banking, securities, insurance, and credit-scoring services. This includes expansion into Europe through partnerships with luxury retailers. The news: Chinese regulators are reportedly looking into requiring Tencent to add WeChat Pay to its financial holding company, sources familiar with the matter told Bloomberg. In the past few years, WeChat has entered into partnerships with firms abroad to offer WeChat payment services abroad for Chinese tourists to facilitate transactions. Alipay and WeChat Pay maintain 55 percent and 40 percent of the China mobile payments market respectively. The expansion into Malaysia may signal more such targeting of local markets and may encourage locals and local firms to use WeChat Pay, making WeChat even more useful for Chinese travelers.īy expanding the range of goods and services that can be paid for through WeChat Pay, Chinese travelers to Malaysia could hypothetically avoid hard cash exchanges altogether and enjoy cashless travel experiences abroad.Īlipay is still the larger of the two mobile payment services, but WeChat Pay is gaining ground quickly. The expansion into Malaysia may signal more such targeting of local markets and may encourage locals and local firms to use WeChat Pay, making WeChat even more useful for Chinese travelers Grace Yin, director of WeChat Pay, noted, “The short-term target is still Chinese tourists… The priority is nearby countries most frequented by them, such as those in Southeast Asia.” Malaysia will be the first market outside of mainland China that WeChat offers this kind of service.Īlthough this move also targets local Malaysians, Tencent maintains that it is still fundamentally a move to facilitate Chinese tourism.
Instead of simply entering into partnerships with firms to offer WeChat Pay, Tencent’s Malaysia application targets locals as well as Chinese tourists.
#TENCENT WECHAT ECNY WECHAT PAY 800M LICENSE#
Tencent, the developer of the social media and messaging app WeChat, has applied for a license to allow Malaysians to link local bank accounts to WeChat Pay and use the service for mobile payments. Malaysia is the latest market WeChat Pay is targeting to overtake Alipay, but its newest move is a sharp departure from previous strategies. The bigger picture:While not definite, an order to bring WeChat Pay under Tencent’s financial holding company would extend the government’s crackdown on Tencent and other Chinese tech powerhouses.Alipay and WeChat Pay are both attempting to expand rapidly abroad in a bid to capture revenue from the growing number of Chinese tourists. This could open a Pandora's box of unwanted regulatory scrutiny for Tencent. Bringing WeChat Pay under the financial holding company would also give the government access to the mobile wallet’s user data, including transaction information.But the restructuring might lead to additional steps for consumers that wear away one of WeChat’s biggest advantages: convenience. WeChat users may still be able to do all these things with WeChat Pay folded into Tencent’s financial holding company.In order to use the digital yuan on WeChat, users have to first sign up with WeBank, Tencent’s online bank. The mobile wallet provides the transaction infrastructure that lets WeChat users do everything from sending peer-to-peer payments to paying bills and booking flights. On April 7, 2022, Tencent announced that it will now enable users to use the digital yuan as a payment option on its social media and payment app WeChat in the 23 pilot regions listed above. Why this matters:WeChat Pay is an integral part of the WeChat super app, which this year is expected to reach 811 million users, accounting for more than half (57.9%) of China’s population, per Insider Intelligence forecasts. The order would be similar to that of Ant Group, which was asked last year to restructure into a financial holding company to cut what regulators called “improper linkages” between Alipay and Ant Group’s consumer credit offerings.Early indications suggested WeChat Pay would not be included in the financial holding company, but sentiments may have changed: Regulators allegedly don’t think WeChat Pay’s extensive services are covered by the payments license owned by TenPay-the back-end provider of WeChat’s wallet services.
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