September 24, 2013
WeChat, a social messaging app has registered about 400 Mn users around the world since its inception in January, 2011. WeChat (popularly known as Weixin in China) has a strong presence in China, only around 70 Mn users live outside China, according to TechInAsia.
WeChat’s success has driven its parent company’s (Tencent) stock valuation to $100 Bn. Tencent is classified as one of Asia’s biggest technology firm and has strong presence in China. It also competes with Alibaba, an e-commerce firm.
What’s interesting about WeChat is that unlike other social networks, WeChat has said no to revenue through advertisements citing bandwidth reasons. Its noteworthy that similar approach has been followed by one more major player - Whatsapp.
The Payment gig
In August, 2013 Tencent announced that they would roll out mobile payments, social gaming and a sticker store through the WeChat v5.0 app on iOS platform. The mobile payments option through WeChat though is restricted to users in China.
Last week, WeChat rolled out celebrity wake-up call service. Through this service, users get pre-recorded calls from Chinese celebrities like Chen Kun. This service costs users $2.94 a month.
The latest update from WeChat is the introduction of WeChat enabled vending machines. Through this service, users pay for bottled drinks within the chat app. In a move to increase user adoption, Tencent has rolled out a promotional offer allowing users of WeChat to buy maximum of 2 drinks at a discounted rate. If a drink costs a user between 50 cents to 80 cents, through this promotional offer, users can buy it for 16 cents. Ubox, a company in China is driving this integration between mobile payments and vending machines.
To make a payment through WeChat, user’s bank account is linked with Tenpay (Tencent’s online payment system).
LTP View: Connecting the offline world payments to online or mobile is a good approach. It reduces dependency on cash and makes transactions simple and cashless.
WeChat is very popular in China with 300 million+ subscribers there. It should be a great thing to be able to pay for your soda pop even while you are chatting. This is one of the first kind of immersive payments very well integrated into an already habitual process like chat.