Tencent, UnionPay Agree On QR Code Standard To Streamline Mobile Payments

Caixin Global reports that Chinese mobile transaction company Tencent has decided to combine part of its authentication software with government-owned rival UnionPay. This collaboration will expand UnionPay’s market penetration and further a Chinese government initiative for same-sector partnership.

The collaboration will let consumers of UnionPay’s popular QuickPass app make financial payments utilizing the same technology (QR codes) that Tencent’s WeChat Pay platform also uses.

Tencent and UnionPay’s working together will enable multiple retailers to interface with a greater number of mobile payment apps without displaying multiple QR codes. The collaboration also increases options for consumers. Regional rival Alipay interacts with its customers with a similar, but not integrated software system.

Tencent and UnionPay will also work together to develop a compatible way to utilize facial recognition technology in their respective mobile payment systems.

Ant Financial’s Alipay and other brands owned by Tencent currently dominate China’s mobile financial payment digital market. In 2017, however, the country’s traditional banking sector intensified its challenge by backing QuickPass, a financial software system developed by main bank card supplier UnionPay.

Caixin estimates that, despite new and growing competition, Tencent and Alipay, the two dominant players in this regional space, together hold more than 90 percent of the Chinese mobile payment market.

In August of 2019, as part of a multiyear plan for developing the financial technology sector, the People’s Bank of China revealed plans to adopt and implement integrated payment systems across the digital space and facilitate better coordination between key players in the industry sector.

Also in 2019, the People’s Bank Of China published the 2019 China Financial Stability Report which detailed how approximately 586 banks and financial institutions in the country were extremely risky and warranted significant changes.