China asks Tencent to cut WeChat's mobile payment market share: Report

Chinese regulators have asked Tencent Holdings, the parent company of all-in-one mobile app WeChat, to reduce its market share in the country's mobile payments business, a report said on Friday, May 31.

WeChat, seen as China's top ubiquitous app, dominates the online payments segment. It had a total of 1.36 billion monthly active users as of March-end.

The authorities in Beijing have asked WeChat to bring down its market share for in-person payments, Nikkei Asia reported, citing sources. The directive is not aimed at payments made for online shopping by scanning QR codes, it clarified.

The exact market share of mobile payment companies is not released by the Chinese regulators. Service providers in China make different set of claims due to differing set of calculations. However, Nikkei Asia learnt from sources that WeChat's market share is in the ratio of 3:2 as compared to its nearest rival Alipay, which is owned by the Ant Group.

While there are around 185 payments service providers in China, the market is dominated by WeChat and Alipay.

The sources who spoke to Nikkei Asia said WeChat has not been given a specific numerical target to be met the regulators. However, one of them was quoted as saying that "WeChat is not targeting user expansion, and it is very cautious about the potential risks of growing too big".

In terms of value, the overall mobile payment transactions in China reached $12 trillion as of March 2024, as per the data shared by Analysys, a Beijing-based consultancy.

What's the directive for UPI service providers in India?

The National Payments Corporation of India (NPCI), a regulatory body, had decided to impose a cap of 30% market share for mobile payment companies by 2022-end. The deadline was later extended till December 31, 2024, as the market continues to remain dominated by Alphabet-owned Google Pay and Walmart's PhonePe.

According to news agency Reuters, the NPCI is expected to further push the deadline to avoid disruption in the country's move towards cashless payments.

As of April, PhonePe commanded a market share of 48.3%, whereas Google Pay's market share stood at 44%. The two entities accounted for a total of 11.5 billion transactions during the month.