WeChat Pay to keep overseas focus on outbound tourism instead of offering more local wallets
WeChat Pay says it will be difficult to develop local wallets for overseas customers
Tencent Holdings' WeChat Pay said it will not seek to offer more local payment wallets to overseas customers over the next three years and will remain focused on serving outbound Chinese tourists better in popular overseas destinations.
WeChat Pay, a payment service integrated into Tencent’s giant social media app WeChat, said it wanted to prioritise outbound Chinese tourists rather than overseas residents in foreign markets due to the huge popularity of the service at home. In addition to mainland China, WeChat Pay currently has local digital wallets in Hong Kong and Malaysia.
“In mainland China we have millions of users so we can make WeChat Pay into a successful payments tool. WeChat Pay’s functionality stems from its popularity in China,” said Grace Yin, director of WeChat Pay’s international operations, in a group media interview at the RISE technology conference in Hong Kong on Wednesday. “We don’t have many WeChat users in overseas countries so we should accept that it will be hard to develop payment tools for them.”
Tencent’s WeChat Pay and Alibaba’s Alipay account for over 90 per cent of China’s domestic mobile payments market. In 2017, Chinese travellers made more than 130 million outbound trips and spent US$115 billion overseas, making China the world's biggest source of outbound tourism, according to a report by China Tourism Academy and the online travel service Ctrip in March. Thailand, Japan and Singapore were the top three destinations for Chinese travellers.
The WeChat social media platform has a user base of around one billion globally. WeChat Pay is currently available in over 40 counties and regions across the world in 13 currencies, and 800 million users have linked their bank accounts or credit cards to the service, said Yin. WeChat Pay will focus on building payments infrastructure in these markets so that Chinese tourists can pay for goods and services in a wide array of outlets and local merchants can receive payment.
The first stage of WeChat Pay’s overseas buildout includes Hong Kong, Macau, South Korea, Japan and Thailand - some of the most popular destinations for Chinese tourists. “WeChat Pay will then seek quick adoption in European countries, the US as well as Australia and New Zealand,” said Yin.
Rival Alipay, the payments subsidiary of Alibaba Group Holding affiliate Ant Financial Services, is currently available in 40 countries and regions according to the company. Apart from creating a payments experience, WeChat Pay and Alipay both forged partnerships earlier this year with tax refund companies to enable Chinese tourists to obtain rebates on their purchases via their respective mobile apps.
However, Yin said she did not agree there is a “war” between Alipay and WeChat Pay in overseas markets. “We compete and cooperate with each other when we step into overseas markets … it’s not a war.”
The China payment providers could face new competition in Southeast Asia though. On Tuesday the region’s dominant ride-hailing company Grab launched an open-platform strategy, allowing third party services including content providers to operate within its app as it aims to become an “everyday superapp”.
The push towards becoming a platform of services as opposed to just offering ride-hailing is similar to the approach that Chinese internet giants have taken. WeChat, for example, evolved from being a messaging app to offering everything from food delivery services, games, payments and even e-commerce.
Grab currently offers GrabPay, an e-wallet service as well as GrabFood, a food delivery service in several markets across Southeast Asia.
New York-listed Alibaba is the parent company of the South China Morning Post.