China in 2 minutes a day
Top news and analysis delivered to your inbox

A payments war between WeChat and Alipay

op business and technology news for April 21, 2017. Part of the daily SupChina news roundup "Toxic ponds near Beijing."
6 months ago
Lucas Niewenhuis

Tech in Asia wrote today on “How WeChat Pay became Alipay’s largest rival,” arguing that the “sticky” social experience of WeChat — the app that mobile users in China spend 35 percent of their screen time using — allowed its “red packet” (红包 hóngbāo) feature to spread rapidly. Though Alipay, owned by Alibaba, still maintains a majority market share (54.7 percent) in mobile payments by providing a “robust array of financial services,” the “red packet” feature to send small cash gifts to friends on WeChat has given WeChat Pay a user base much larger than Alipay’s.

Both companies are now fiercely competing in the online-to-offline (O2O) market, which includes food delivery services and ride hailing. And while it is difficult to predict who will win out in the quickly changing and booming online payment market, Alipay and WeChat are being seen as examples of models of innovation in a new report from the Better Than Cash Alliance. The report, written by a United Nations–affiliated team, notes that “in poor communities, digital payments are proving to be an effective way to open up new economic opportunities and markets for individuals and small businesses.”

By Lucas Niewenhuis
Lucas Niewenhuis is an associate editor at SupChina who helps curate daily news and produce the company's newsletter, app, and website content. Previously, Lucas researched China-Africa relations at the Social Science Research Council and interned at the Council on Foreign Relations in New York. He has studied Chinese language and culture in Shanghai and Beijing, and is a graduate of the University of Michigan.
China in 2 minutes a day
Top news and analysis delivered to your inbox