WeChat gains ground in mobile payments; 697 mln active users worldwide

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 (peer-to-peer) 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 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.

Tencent said that it banked over RMB300 million (USD46 million) from bank transfer fees from WeChatPay, almost all of which came from China.

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 USD 50 billion in bank transfers that month. At that same pace, that would mean close to USD 550 billion in payments processed per year — that’s close to double the USD282 billion that PayPal processes a year.

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.