In an unsurprising move, Grace Yin, Director of WeChat Pay’s International Operations, confirmed in an interview that Tencent’s WeChat Pay would continue to focus almost exclusively on Chinese outbound tourists for the next three years. A move abroad would seem to be the logical next step for both Alipay and WeChat Pay, as both platforms have become wildly popular in China and have few avenues to garner more customers domestically. Still, the challenges of integrating the platforms into banking systems and lack of brand recognition outside of China have prompted both companies to continue focusing on Chinese customers. With more Chinese tourists going abroad every year, making sure WeChat Pay is usable abroad makes it more likely that when users return home they will continue using it.
WeChat Pay has made substantial moves abroad, but it’s all been to ensure Chinese tourists can utilize the platform anywhere and everywhere
While both WeChat Pay and competitor Alipay have made impressive efforts to move abroad in the past few years, the focus has been put squarely upon the Chinese tourist. 2017, in particular, could arguably be described as the “year of the Chinese tourist” for the two mobile payments platforms.
This was something Yin touched on in the same interview, saying “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…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.”
WeChat Pay claims that gearing the platform for foreign users, many without even a WeChat account, may be simply be too challenging
While WeChat Pay is less popular in China than Alipay, WeChat Pay does have the advantage of being integrated into the ubiquitous messaging and social media platform WeChat, with somewhere around 1 billion users. Alipay has been able to keep hold of its top spot in large part because of its integration with Alibaba’s e-commerce empire, namely sites like Taobao and Tmall.
This, in part, explains why neither platform may not ever take off among non-Chinese consumers. While WeChat and Alibaba’s e-commerce sites are incredibly popular, they’re still primarily Chinese affairs. In many ways, this assessment also extends to mobile payments themselves. While Google Pay (formerly Android Pay) and Apple Pay have been available globally for years now, neither has reached critical mass yet. In the United States in particular, credit and debit cards remaining dominant. Japan also hasn’t adopted mobile payments platforms in any meaningful way, although not for lack of trying by Japanese banks and even ANA. The country still uses cash for most transactions.
Catering to non-Chinese customers means popularizing the concept of mobile payments themselves for Tencent and Alibaba
If Alipay and WeChat Pay were to make a move for foreign users, they’d also have to popularize the concept of mobile payments themselves without the benefits of their e-commerce and social media empires. Alibaba, at least, is trying to do just that. Alipay announced last year that it intended to roll out a version of the platform for the Japanese market, but there has been no word on its development since.
The two platforms likely control over 90 percent of the total mobile payments market. However, the latest numbers of the respective market share are from last year, with Alipay controlling 54 percent and WeChat Pay controlling 40 percent. It’s possible that in that time, Tencent’s offering has closed some ground with Alipay. Yin was quoted by the South China Morning Post in the same interview as saying that 800 million users had linked their WeChat accounts to their bank accounts. It’s not clear how many of these users actively use the mobile payments platform, but that figure is likely much lower than the 800 million cited by Yin.