Mobile Payments

Tencent Creating Credit Scoring System To Rival Alibaba

VantageScore Credit Scoring

Alibaba rival Tencent is gearing up to create a competing credit scoring system as it heats up its battle against Alibaba.

According to a news report in The Financial Times, two years ago Ant Financial, the payment arm of Alibaba, rolled out Sesame Credit, using its data to gauge the ability for consumers to pay back their debts. Tencent wants to roll out a similar service, which takes into account the social and financial histories of consumers to assess their ability to pay back loans and other debts.  

In China, the whole idea of a credit scoring system has become popular because younger Chinese consumers often lack a credit history that would give them a high enough score to rent hotel rooms and bicycles without needing to leave some form of payment deposit.

Currently, the Alibaba rival is reportedly testing a system with a small number of its subscribers as both it and Alibaba push to get people to use mobile payments instead of cash. Citing iResearch, the Financial Times reported China’s mobile payment market reached $5.5 trillion in 2016, which is fifty times the size of the U.S., which hit $112 billion in 2016, according to Forrester Research.

The Chinese marketplace is dominated by Alibaba and Tencent, with Tencent closing in on Alibaba’s lead in recent months. Analysys, the market research firm, said Tencent’s market share hit 39.5 percent in the first quarter, while Alibaba’s slipped to 53.7 percent in the same three-month period.

In 2015, Tencent commanded 16 percent of the market, and Alibaba had 71 percent, noted the report. Matthew Brennan, co-founder of tech consultancy China Channel, told the Financial Times that Tencent’s new credit scoring system underscores its desire to grow its payment business, which is currently mainly used for small transactions in places like convenience stores and via peer-to-peer transactions.


New PYMNTS Report: Preventing Financial Crimes Playbook – July 2020 

Call it the great tug-of-war. Fraudsters are teaming up to form elaborate rings that work in sync to launch account takeovers. Chris Tremont, EVP at Radius Bank, tells PYMNTS that financial institutions (FIs) can beat such highly organized fraudsters at their own game. In the July 2020 Preventing Financial Crimes Playbook, Tremont lays out how.

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