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Tencent's WeChat Pay seeks licence for local payment services in Malaysia
[HONG KONG] Tencent Holdings has applied for a licence in Malaysia to offer local payment services via its WeChat Pay, in what would be a first for the platform beyond mainland China and Hong Kong, the director of WeChat Pay's global operation told Reuters.
If approved, users in Malaysia will be able to link their local bank accounts to WeChat Pay and pay for goods and services in ringgit.
"Malaysia has a large Chinese community," Grace Yin said on the sidelines of a Hong Kong technology conference, explaining Tencent's choice of test bed.
WeChat Pay and Alibaba Group Holding's affiliate Alipay are turning China cashless by enabling payments or money transfers at the convenience of a code scan.
The pair are also expanding internationally in tandem with outbound tourism, getting more businesses to accept their services which allow users to make payments using bank accounts in China without complications posed by currency exchange.
Licences for such cross-border payments differ from those required for local payment services. Hong Kong is currently the only location outside mainland China where WeChat Pay and Alipay offer payment services executed entirely in the local currency.
Alipay introduced a separate app for the Hong Kong market in May, its first non-yuan payment app.
Tencent is China's biggest gaming and social media firm by revenue. It said there are over 600 million monthly active users of its QQ Wallet and WeChat Pay, the latter of which is embedded in WeChat, China's most popular social media app with 938 million active users.
Alipay said it has over 450 million active users.
WeChat Pay and Alipay dominate China's mobile banking market, which totalled 18.8 trillion yuan (S$3.826 trillion) worth of transactions in the first three months of 2017, according to consultancy Analysys.
On Monday, Silicon Valley startup Stripe said it had partnered the pair to allow merchants worldwide using Stripe to accept payments from Chinese consumers via WeChat Pay and Alipay.
At present, WeChat Pay can be used at over 130,000 shops in 13 foreign markets - including in the United States, Europe and Japan - and supports 10 currencies, Tencent said.
Ms Yin, who declined to give target growth figures, said expanding WeChat Pay overseas required additional layers of regulatory approval, as well as efforts to explain the system to local businesses.
"We have a large user base in China. It is often the users compelling the vendors or financial institutions to adopt WeChat Pay, so that happens very fast," she said.
Ms Yin said there is no timeline to offer local payment services to more overseas countries, but said "nothing is impossible".
"The short-term target is still Chinese tourists," she said.
"The priority is nearby countries most frequented by them, such as those in South-east Asia."