Almost every social media app is getting into the currency transfer game, but what if users wanted to send more than the occasional $20 to pay back a friend?
With China-based Tencent Holdings’ new plan to introduce a loan feature to its popular WeChat messaging platform, users will be able to do just that, The Wall Street Journal reported Friday (Sept. 11). Lenders and lendees will be able to send and receive funds within a few minutes, with loans capped at about $31,350 in personal transfers. However, Tencent explained that users will not be forced to back their transactions with any kind of collateral.
The announcement signals the move of one of China’s largest Internet technology companies into the social commerce market. WeChat boasted 600 million users in Q2 2015, a continuation of a steady rise in membership that began with the messaging app’s launch in 2011.
While such a large cap on peer-to-peer loans might seem excessive, The WSJ explained that the majority of WeChat users are predominantly white-collar workers with steady jobs residing in thriving urban markets. Cynthia Meng, a financial analyst at Jefferies, told The WSJ that because Tencent also owns another massively popular messaging app in China called Mobile QQ, offering the loan services on both platforms could help Tencent and WeBank, an institution run by the organization, to identify users who could be good fits for further financial services.
“Internet finance is still at its early stage, and the regulatory framework is still evolving,” Meng said. “Between WeChat and Mobile QQ, Tencent covers most of China’s smartphone users. This is the beginning of Internet finance.”
Not just content with domestic affairs, Tencent is also pushing to expand its footprint in neighboring countries, China News Service reported. In a partnership with the Japanese department store chain Daimaru Matsuzakaya, Tencent will offer mobile payment options to Chinese tourists as of Sept. 30.