WeChat Pay Ready to Dominate eWallet Market
It's one of the most popular mobile and digital wallet payment platforms, based in the Republic of China. The app belongs to Tencent, a Chinese company valued at over US$472billion
WeChat Pay is one of the most popular mobile and digital wallet payment platforms to come out the Republic of China. It was developed by Tencent, a Chinese company reputed to be one of the most valuable technology firms in the world, valued at over US$472billion.
The payment platform is an integrated feature of WeChat - a social media platform that started as a project at the Tencent Guangzhou centre in 2010. It was formally launched in 2011 and today is one of the most used mobile chat apps in the world ― notably in China and Bhutan.
How WeChat Got Here
It was reported that the first version of the app was developed by Zhang Xiaolong (also known as Allen Xiaolong). Xialong is credited with the development of WeChat and Foxmail. He currently holds two titles in Tencent - Senior Executive Vice President and President of Weixin Group, a subsidiary of Tencent Holdings Limited.
The WeChat app was launched as “Weixin” and it still goes by the moniker in China. The name was documented to have been the idea of Ma Huateng (a.k.a Pony Ma). Huateng doubles as a co-founder and the CEO of Tencent.
The name WeChat came about in 2012. User number hit 100 million and Tencent became confident the app would work on the international markets.
Growth in Numbers
In 2012, there were about 100 million monthly active users (MUAs) on WeChat. Following its launch on the international market, this number increased exponentially. After the company incorporated the WeChat Pay function in 2013, the number of users increased to approximately by 355 million at year end.
The app crossed the 700 million user benchmark in March 2017, rising to 900 million in 2018 and presently the number is predicted to have reached more than 1 billion users worldwide.
History of WeChat Pay
Version 5.0 of WeChat was released in 2013, the first iteration of the app to include the payment service feature. This was Tencent’s response to Alibaba’s AliPay which was released in 2004 and had become dominant in the Chinese payment market.
At first, the company designed the feature to only allow payment between users (P2P) and to accommodate in-app purchases. The feature was upgraded to handle payment on different platforms following the explosion of the mobile ecommerce market.
WeChat users intending to use the payment system have to link their bank account information to their app account. After this, they can use the WeChat payment option anywhere to perform transactions, including at Point of Sale (POS) using QR code scanning and NFC technology.
WeChat is said to have a competitive advantage over AliPay considering its large amount of active monthly users on its main WeChat platform.
About 84.3% of the total market share of the third-party mobile payment was garnered by WeChat Pay in Q3 2018.
Embedded in the Marketplace
A joint study by Tencent, Renmin University of China, and Ipsos revealed that 40% of Chinese people now carries less than 100 RMB ($15) cash with them with 14% of them carrying no cash at all. They instead prefer to pay with their mobile phone using payment platforms like WeChat Pay.
AliPay is WeChat Pay’s main rival in China. WeChat accounts for about 39% of China’s third-party payment market while AliPay accounts for 54%. The market is estimated to be worth more than US$4.13trillion.
WeChat Pay’s expansion into foreign markets aims to offer an all-round satisfactory experience to their users. They want to make payments easy for Chinese tourist abroad and those at home wanting to order from overseas.
It makes sense for WeChat to pursue the expansion of its payment platform abroad instead of its messaging app; Facebook has already established itself as the undisputed market leader.
WeChat is targeting European countries that have a high influx of Chinese tourists, among other countries in South East Asia. On 25th January 2018, Tencent announced it would be accepting international cards on WeChat Pay, facilitating growth into other markets.
Presently, there are more than 49 countries that have WeChat Pay infrastructure to accept payments outside mainland China. Some of the countries include;
- South Korea
- Hong Kong
Infographic - mobilemonkey.com