Tencent’s WeChat Pay targets Chinese outbound travellers to boost its overseas market
WeChat Pay, a mobile payment service operated by China’s second largest internet giant Tencent, will target Chinese travellers in order to expand its overseas market, Grace Yin, director of WeChat Pay’s international operations, told the Rise technology conference in Hong Kong on Tuesday.
“We will first make WeChat Pay available for Chinese customers when they travel outside [China],” Yin said. Chinese consumers are keen on using mobile payment services, dominated by rivals WeChat Pay and Alibaba’s Alipay, for everything from shopping to medical visits.
“We want Chinese customers to enjoy the same services when they go abroad, so the surge in outbound travellers will be the first market WeChat Pay targets,” Yin said.
Data from the United Nations World Tourism Organisation shows that Chinese tourists spent the most of any nation in 2016, splashing out a total of US$261 billion abroad.
On Monday, Tencent launched its WeChat Pay service in Europe in a partnership with German payments firm Wirecard.
Yin admitted there were challenges for WeChat Pay as it seeks to expand internationally. “The most difficult issue is how to educate overseas business operators to accept a new payment service when they already own payment options,” she said. “We also have many challenges to meet local rules and regulations in exploring overseas markets.”
Regulation compliance in China is also one of the priorities for Tencent, said Jim Lai, vice president of Tencent, speaking at the Hong Kong Summit conference on Tuesday. “We have worked for over 12 years with regulators in China and we know that if we don’t work closely with regulators... we see a downside of the business,” he said. “[Getting regulatory support] is the key to the success of most Chinese internet companies.”
WeChat Pay currently has 600 million monthly active users while Tencent’s social media service WeChat has 938 million monthly active users. However, WeChat Pay’s market share in China’s US$5.5 trillion online payment market is still lower than Alipay.
In the first quarter of 2017, Alipay held a 54 per cent share of mobile transactions by value while WeChat Pay was at 40 per cent, according to research firm Analysys.
However, the gap is narrowing with Alipay accounting for over 80 per cent of transaction value three years ago.
“Active users of WeChat Pay and [our] market share have increased impressively,” said Yin. “And the customers are diversifying, with the traditional sectors such as hospital and government departments also becoming our users now.”
Alibaba is the owner of South China Morning Post.