The battle in mobile payments, at least in one corner of China, is over — for now.
Financial Times reported on Monday (May 2) that Tencent, the social networking and online gaming company, “has pulled back from a high-stakes battle” with eCommerce giant Alibaba in a joust over the country’s mobile payments arena. This comes after Tencent, as the publication noted, spent billions of renminbi in an effort to gather new customers, largely through subsidies.
Whereas once the company spent hundreds of millions of renminbi on transaction fees — instead of passing those fees onto the end consumer — that appears to have run its course. FT noted that, in March, the company began levying fees on its users who opt to transfer funds between the payments service that has been offered by the company, known as WeChat Pay, and their bank accounts.
The past several months have seen a battle between the two companies as there were several promotions aimed at getting users to align with either firm. That included the “red envelope” promotions that were basically cash incentives to bring users to one firm over the other.
In the meantime, the market share battle appears to be over, as Tencent has, through its payments unit, garnered only a 20 percent market share in China, as measured by third-party payments, less than half of that maintained by Alipay, said FT, citing iResearch.