Tencent has always left its mark on domestic payments through WeChat Pay, … [+]
Like rival Alibaba, Tencent has developed a large portfolio of overseas fintech investments. Some of these are strategic bets on emerging big tech companies with fintech divisions, such as Philippines’ Voyager Innovations and Singapore’s Sea Group, which Tencent believes will eventually become dominant players. . Other investments are focused on facilitating access to the mainland Chinese market for fintech companies with a niche in the mainland market, such as Airwallex, which was founded in Australia and is headquartered in Hong Kong.
Alibaba’s Ant Group has quietly sought to build its own cross-border payments ecosystem outside of China, but Tencent has not had the overarching ambitions to match its overseas fintech investments. This can be partially explained by his Tencent fintech prowess, which stems from the WeChat super-app, which is not widely used outside mainland China and certain Chinese diaspora communities.
Indeed, Tencent is trying to build a WeChat payment rail overseas, and WeChat Pay is widely accepted in many parts of the world where Chinese tourists travel. However, it has not scaled beyond that and is so closely tied to China’s domestic payments ecosystem that it lacks the appeal of crossover to wider international markets. Simply put, if you don’t do banking in mainland China, you may not have much use for WeChat Pay.
Without the ability to expand the reach of the WeChat digital financial services ecosystem, nothing has ever brought together the various fintech players in Tencent’s international investment portfolio.
Tenpay Global and Tenpay Global Transfers
Once Ant Group launched Alipay+, it was only a matter of time before Tencent responded with a new product (or products) of its own. Naturally, like Alipay+, Tenpay Global and Tenpay Global Remittances don’t represent watershed moments, but more like rebranding campaigns for existing services with a few tweaks here and there.
Tenpay Global will integrate a suite of business and consumer cross-border payment products and solutions to serve different customer segments, including e-commerce platforms, global corporate and individual customers, and personal remittances. In promises, it can be useful.
Meanwhile, Tenpay Global Remittances will allow WeChat users in mainland China to receive remittances directly into their WeChat wallets. While this sounds like an add-on to a new feature, Tencent said in a press release that “this new feature builds on existing remittance services available through Weixin’s bundled bank cards.” increase.
Tencent’s financial division will continue to partner with various global fintech companies to expand cross-border payment services. Money transfer companies that count as partners include Wise, Remitly, E9Pay, Debunk Remit, Panda Remit, Paysend and WireBarley.
To attract users of remittance services, Tencent and its partners will provide subsidies. They call it an “incentive program”. This is very similar to what Alipay+ and its payment partners are doing.
overcoming obstacles
One of the limitations of Tencent’s cross-border payment business is that it will be out of control. China’s capital controls. Although China is the second largest remittance market in the world after India, Tenpay Global Remittances has yet to have an opportunity to build outbound payment alternatives. In a nutshell, money can only go one way for now. It’s China.
What Tencent can do is partner with companies licensed to process outbound cross-border payments, but this is clearly less optimal than being able to process the payments themselves directly. I invested in Easy Transfer. Easy Transfer aims to ease the stress of paying tuition fees for many Chinese students who choose to study abroad.
This market is promising. In 2019, more than 700,000 Chinese were studying outside mainland China, according to data compiled by Statista, but that number dropped to just 350,000 in 2020, according to Tencent. And WeChat has 500,000 users, including “international students”.
Easy Transfer founder and CEO Tony Gao said in an interview with TechCrunch in January 2022 that the internet giant now owns about 5% of his company. directly. Instead, it works with financial institutions that have cross-border payments licenses in China.
“From anti-money laundering, identity verification to information security, WeChat makes cross-border payment transactions safer,” Gao said.
Perhaps in time, Tencent will be able to extend the reach of the WeChat fintech ecosystem abroad.
