WeChat Pay () is a

mobile payment A mobile payment, also referred to as mobile money, mobile money transfer and mobile wallet, is any of various payment processing services operated under financial regulations and performed from or via a mobile device, as the cardinal class of d ...

and

digital wallet A digital wallet, also known as an e-wallet, is an electronic device, online service, or software program that allows one party to make electronic transactions with another party bartering digital currency units for goods and services. This can ...

service by

WeChat WeChat () is a Chinese instant messaging, social media, and mobile payment app developed by Tencent. First released in 2011, it became the world's largest standalone mobile app in 2018, with over 1 billion monthly active users. WeChat has bee ...

based in China that allows users to make

mobile payments A mobile payment, also referred to as mobile money, mobile money transfer and mobile wallet, is any of various payment processing services operated under financial regulations and performed from or via a mobile device, as the cardinal class of d ...

and online transactions. As of March 2016,

WeChat Pay WeChat Pay () is a mobile payment and digital wallet service by WeChat based in China that allows users to make mobile payments and online transactions. As of March 2016, WeChat Pay had over 300 million users. WeChat Pay's main competitor in Ch ...

had over 300 million users. WeChat Pay's main competitor in China and the market leader in online payments is Alibaba Group's

Alipay Alipay () is a third-party mobile and online payment platform, established in Hangzhou, China in February 2004 by Alibaba Group and its founder Jack Ma. In 2015, Alipay moved its headquarters to Pudong, Shanghai, although its parent company An ...

. Alibaba company founder

Jack Ma Jack Ma Yun (; born 10 September 1964) is a Chinese business magnate, investor and philanthropist. He is the co-founder and former executive chairman of Alibaba Group, a multinational technology conglomerate. In addition, he co-founded Yunfeng ...

considered the red envelope feature to be a "

Pearl Harbor Pearl Harbor is an American lagoon harbor on the island of Oahu, Hawaii, west of Honolulu. It was often visited by the Naval fleet of the United States, before it was acquired from the Hawaiian Kingdom by the U.S. with the signing of the Re ...

moment", as it began to erode Alipay's historic dominance in the

online payment An e-commerce payment system (or an electronic payment system) facilitates the acceptance of electronic payment for offline transfer, also known as a subcomponent of electronic data interchange (EDI), e-commerce payment systems have become incre ...

s industry in China, especially in peer-to-peer money transfer. The success prompted Alibaba to launch its own version of virtual red envelopes in its competing Laiwang service. Other competitors,

Baidu Baidu, Inc. ( ; , meaning "hundred times") is a Chinese multinational technology company specializing in Internet-related services and products and artificial intelligence (AI), headquartered in Beijing's Haidian District. It is one of the la ...

Wallet and

Sina Weibo Sina Weibo (新浪微博) is a Chinese microblogging ( weibo) website. Launched by Sina Corporation on 14 August 2009, it is one of the biggest social media platforms in China, with over 582 million monthly active users (252 million daily acti ...

, also launched similar features.

WeChat Pay statistics

- WeChat Pay reached 900 million users in 2021.

Service

Users who have provided bank account information may use the app to pay bills, order goods and services, transfer money to other users, and pay in stores if the stores have a WeChat payment option. Vetted third parties, known as "official accounts", offer these services by developing lightweight "apps within the app". Users can link their Chinese bank accounts, as well as

Visa Visa most commonly refers to: *Visa Inc., a US multinational financial and payment cards company ** Visa Debit card issued by the above company ** Visa Electron, a debit card ** Visa Plus, an interbank network *Travel visa, a document that allows ...

, MasterCard and JCB.

() is a

service incorporated into

, which allows users to perform

s and send money between contacts. Now, WeChat Pay has six different payment products: Quick Payment, QR Code Payment, Mini Program Payment, Official Account Payment, In-APP Payment, and Web Payment. Although users receive immediate notification of the transaction, the

system is not an

instant payment Instant payment (sometimes referred to as real-time payment or faster payment) is a method of exchanging money and processing payments, allowing for almost immediate transfer of money between bank accounts, instead of the more typical one to thr ...

instrument, because the funds transfer between counterparts is not immediate. The settlement time depends on the payment method chosen by the customer. All

users have their own WeChat Payment accounts. Users can acquire a balance by linking their

account to their debit cards, or by receiving money from other users. For non-Chinese users of

, an additional identity verification process of providing a photo of a valid ID as well as oneself is required before certain functions of

become available. Users who link their credit card can only make payments to vendors, and cannot use this to top up WeChat balances.

can be used for digital payments, as well as payments from participating vendors.

Red envelope

In 2014, for

Chinese New Year Chinese New Year is the festival that celebrates the beginning of a New Year, new year on the traditional lunisolar calendar, lunisolar and solar Chinese calendar. In Sinophone, Chinese and other East Asian cultures, the festival is commonly r ...

introduced a feature for distributing virtual

red envelope In East and Southeast Asian cultures, a red envelope, red packet or red pocket () is a monetary gift given during holidays or for special occasions such as a wedding, a graduation, or the birth of a baby. Although the red envelope was populari ...

s, modelled after the Chinese tradition of exchanging packets of money among friends and family members during holidays. The feature allows users to send money to contacts and groups as gifts. When sent to groups, the money is distributed equally, or in random shares ("Lucky Money"). The feature was launched through a promotion during

China Central Television China Central Television (CCTV) is a Chinese state- and political party-owned broadcaster controlled by the Chinese Communist Party (CCP). Its 50 different channels broadcast a variety of programing to more than one billion viewers in six lan ...

(CCTV)'s heavily watched New Year's Gala, where viewers were instructed to shake their phones during the broadcast for a chance to win sponsored cash prizes from red envelopes. The red envelope feature significantly increased the adoption of

. According to the Wall Street Journal, 16 million red envelopes were sent in the first 24 hours of this new feature's launch. A month after its launch, WeChat Pay's user base expanded from 30 million to 100 million users, and 20 million red envelopes were distributed during the New Year holiday. In 2016, 3.2 billion red envelopes were sent over the holiday period, and 409,000 alone were sent at midnight on Chinese New Year.

History

In 2016,

started a service charge if users transferred cash from their WeChat wallet to their debit cards. On 1 March, WeChat payment stopped collecting fees for the transfer function. Starting from the same day, fees will be charged for withdrawals. Each user had a 1,000 Yuan (about US$150) free withdrawal limit. Further withdrawals of more than 1,000 Yuan were charged a 0.1 percent fee with a minimum of 0.1 Yuan per withdrawal. Other payment functions including red envelopes and transfers were still free. In 2019 it was reported that

had overtaken Alibaba with 800 million active WeChat mobile payment users versus 520 million for Alibaba's Alipay. However Alibaba had a 54 per cent share of the Chinese mobile online payments market in 2017 compared to WeChat's 37 per cent share. In the same year, Tencent introduced "WeChat Pay HK", a payment service for users in Hong Kong. Transactions are carried out with the

Hong Kong dollar The Hong Kong dollar (, currency symbol, sign: HK$; ISO 4217, code: HKD) is the official currency of the Hong Kong, Hong Kong Special Administrative Region. It is subdivided into 100 cent (currency), cents or 1000 Mill (currency), mils. The H ...

. In 2019 it was reported that Chinese users can use WeChat Pay in 25 countries outside of

China China, officially the People's Republic of China (PRC), is a country in East Asia. It is the world's most populous country, with a population exceeding 1.4 billion, slightly ahead of India. China spans the equivalent of five time zones and ...

, including,

Italy Italy ( it, Italia ), officially the Italian Republic, ) or the Republic of Italy, is a country in Southern Europe. It is located in the middle of the Mediterranean Sea, and its territory largely coincides with the homonymous geographical re ...

South Africa South Africa, officially the Republic of South Africa (RSA), is the southernmost country in Africa. It is bounded to the south by of coastline that stretch along the South Atlantic and Indian Oceans; to the north by the neighbouring countri ...

and the UK. In the 2018

Berkshire Hathaway Berkshire Hathaway Inc. () is an American Multinational corporation, multinational conglomerate (company), conglomerate holding company headquartered in Omaha, Nebraska, United States. Its main business and source of capital is insurance, from ...

annual shareholders meeting,

Charlie Munger Charles Thomas Munger (born January 1, 1924) is an American billionaire investor, businessman, and former real estate attorney. He is vice chairman of Berkshire Hathaway, the conglomerate controlled by Warren Buffett; Buffett has described Mung ...

identified

as one of the few potential competitors to

, Mastercard and

American Express American Express Company (Amex) is an American multinational corporation specialized in payment card services headquartered at 200 Vesey Street in the Battery Park City neighborhood of Lower Manhattan in New York City. The company was found ...

. In 2021, the mandate by the

Ministry of Industry and Information Technology The Ministry of Industry and Information Technology of the Chinese government, established in March 2008, is the state agency of the People's Republic of China responsible for regulation and development of the postal service, Internet, wireless ...

(MIIT) to open up the "

walled garden A walled garden is a garden enclosed by high walls, especially when this is done for horticultural rather than security purposes, although originally all gardens may have been enclosed for protection from animal or human intruders. In temperate c ...

" ecosystems of the major tech companies has led to the introduction of interoperability of payment QR codes of

and competing

and

UnionPay UnionPay (), also known as China UnionPay () or by its abbreviation, CUP or UPI internationally, is a Chinese state-owned financial services corporation headquartered in Shanghai, China. It provides bank card services and a major card scheme ...

Cloud QuickPass The app of UnionPay ( zh, s=云闪付, p=Yúnshǎnfù, literally “Cloud QuickPass”) is a mobile and online payment service, developed and operated by UnionPay, the national Chinese bank card clearing service. Launched in 2017, it was desig ...

platforms.

References

External links

* {{Mobile payments Mobile payments in China Online payments WeChat