While people in the West are still getting to grips with new ways to pay like Apple Pay and Samsung Pay, a Chinese social network is changing the way people in China handle financial transactions.
WeChat, a mobile messaging app developed by Tencent in 2011, has grown into something far bigger than its origins as a Chinese-style WhatsApp. For example, users are able to share pictures and status updates on the Moments feature, not unlike Facebook. But beginning in 2013, WeChat introduced a payment service called WeChat Pay that allowed users of the app to transfer money to each other and purchase in-app services, such as hailing a cab, paying utilities, and renting a bike.
How Does it Work and What Does it Do?
While Apple Pay and its Android counterparts rely on Near-Field Communication (NFC) technology to process payments, alongside proprietary fingerprint verification methods such as Touch ID, WeChat Pay’s method is less hi-tech, but nonetheless effective.
The app instead utilizes Quick Response (QR) scanning, where one user scans the other’s QR code with their phone camera. The transaction is verified with a user-created PIN number and the money is instantly transferred. The user may link a credit or debit card to their WeChat account, but they can also transfer money to a ‘Wallet’ that may be used separately from any card linked to the account, allowing for easy payments in the event someone’s card gets declined.
Stores now have official WeChat accounts that bypass the need for a Point of Sale (POS) system, allowing users to simply scan the stores’ QR code. In some instances a QR code might not even be needed, as two WeChat friends could send money to each other with a PIN-verified transfer, either directly or through a hongbao, a gift-giving feature reminiscent of people exchanging red envelopes full of money during Chinese New Year.
WeChat Pay has seen widespread adoption at a pace that Apple, Samsung, and other companies can only dream of. WeChat has processed $1.2 trillion in payments from 2016. As of 2017, WeChat Pay boasts 600 million users compared to Apple Pay’s 86 million and Samsung Pay’s 34 million.
That statistic is not even counting Tencent’s biggest competition, Alibaba, whose Alipay service has 450 million users, although its payment volume is bigger at $1.7 trillion. So prominent is WeChat Pay that Apple has opened up payments on the Chinese Apple Music and App Store services to Tencent’s mobile payment platform.
In July 2017, Tencent brought the service to Europe, targeting Chinese tourists to the continent. Chinese citizens are so reliant on the service that Markus Eichinger of Wirecard said that WeChat Pay is ‘a must-have payment option’, especially considering that some European stores might not accept Chinese UnionPay cards.
WeChat it to Me
WeChat has made a tremendous splash in not just the social networking space, but that of mobile payments as well. Phone manufacturers such as Apple and Samsung are trying to make paying with one’s phone easier than pulling out a fistful of cash or their card. While they are arguably successful, WeChat has literally changed the way business is done in China, almost to the point where the phrase ‘why don’t you WeChat the money to me’ would not sound out of the ordinary.