Chinese social media app taps into cultural ideals and boosts mobile payments in the process
Tomorrow is the Chinese New Year, and while the Year of the Horse is upon us, the mobile payments space also seems to be flourishing thanks to the biggest celebration in the Chinese calendar.
How you ask? Well, through Tencent’s social media app WeChat.
While its traditional to give family, employees, and friends red envelopes (or hongbao) with money in on this celebration, it seems that a digital version known as the “New Year Red Envelope” on WeChat is proving immensely popular.
The app allows users to make a payment through their mobile to a virtual hongbao and then send that across to friends and family. It’s a wonderful opportunity for Tencent, allowing them to monetise WeChat users – and in the process help gain market share over Alibaba. However, it’s also reportedly more enjoyable than Alibaba’s hongbao app as WeChat lets users do more than simply exchange money with each other. Users can upload a lump sum of cash to the app, while it then disperses the amount between a group of friends in five random amounts.
This means it incorporates a semi gambling aspect to proceedings, meaning some friends may end up with large sums and others with smaller or nothing at all.
So far, so innocent. How will this help boost the mobile payments market in China?
Well, Tencent require users to link up their bank accounts to WeChat so they can use the hongao service properly. And, for those who want to receive money, you guessed it, they need to sign up with their account details too.
It’s worked a charm too as many have signed up for the service, and now they’ve entered their details into the app, it means there’s less future resistance to making any sort of payment or purchase through WeChat.
It’s a smart move, and one that will undoubtedly work in Tencent’s favour if more users decide they want to purchase goods through their mobile.
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