WeChat, China's smash hit chat app, has long been a bellwether for the future of mobile messaging. It was first to popularize putting brands in chat and integrating third-party services, two trends Facebook-owned WhatsApp and Messenger and others are jumping on, and it looks like payment is the next major focus.
Tencent, the company behind WeChat, just announced impressive end of year financials that included its highest quarterly revenue growth for three years. Among the other items disclosed, WeChat is now up to 697 million active users worldwide each month having added close to 200 million to that figure over the past year.
Beyond text messaging, voice and video calling, the service includes a social network timeline, branded accounts, shopping, games and more. Payment is another area and over the past year, Tencent has put considerable focus into its China-based service, WeChatPay, which can be used to transfer money between WeChat users and make payments online and with participating offline retailers.
Tencent previously disclosed that 200 million user cards were attached to the payment service as of November 2015, thanks to a genius campaign that taps into China's tradition of sending red envelopes during New Year, but now it said the figure is "safely more than 300 million" while it also gave us clues as to how large its volumes could become.
Reuters reported that Pony Ma, Tencent CEO, told reporters at a Hong Kong press conference that the company took 0.1 percent on transactions, which means the service saw close to $50 billion in bank transfers that month. At that same pace, that would mean close to $550 billion in payments processed per year — that's close to double the $282 billion that PayPal processes a year.
据路透社报道，腾讯CEO马化腾在香港的新闻发布会上表示，微信要向每笔交易收取0.1%的手续费，这意味着微信支付在当月的交易总量超过500亿美元。 如果这种势头能延续下去的话，微信支付每年要处理的交易量至少高达5500亿美元，这将是美国移动支付公司PayPal去年交易总量的近两倍，而PayPal 2015年的交易量仅为2820亿美元。
That's hugely impressive and it shows that WeChat is a growing threat to Alipay, the service controlled by Alibaba's $60 billion-valued payment affiliate. Alipay hasn't disclosed its annual payment volume since 2013 — when it recorded $519 billion — though that figure will be much higher now. While Alipay is established as China's top payment option with 500 million users and 200 million credit cards, the sheer convenience and mainstream adoption of WeChat play massively in its favor.
Tencent is also stoking the fire by dropping fees for peer-to-peer transactions, a move aimed at making WeChat the standard for moving money between friends. Another new policy charges users a fee when they transfer a certain from their WeChatPay wallet to their bank account, thus incentivizing them to retain funds in their account, which will presumably then be spent on or distributed to others via the service.
WeChat pulls in more money from games and advertising, and President Martin Lau said that Tencent's doesn't anticipate WeChatPay becoming a profitable business because of subsidizing merchants and other costs. But, the real value, Lau argued is that WeChatPay "will benefit our overall ecosystem," such as empowering future advertisements with one-click purchasing from users, and synergies with financial services like Tencent's wealth management fund and online bank.