PBoC May Issue Payment License to Wechat
Sootoo, 4/17/13
The China Payment and Clearing Association, which is overseen by the People's Bank of China (PBoC), revealed yesterday that the PBoC and the CPCA are looking into the possibility of issuing a license permitting Tencent's (0700.HK) WeChat (Weixin) mobile messaging application to handle payments. Both organizations are currently gathering material and conducting research into a number of topics, such as how WeChat would bill merchant partners for service and management fees.
If WeChat were to receive a third-party payment license, it would be unlikely to happen before 2014. The license could last up to five years.
Industry figures are reportedly confused as to why the PBoC and CPCA would be considering issuing WeChat a third-party payment license, given that WeChat is not a payment tool - and, more importantly, that its parent company Tencent was one of the first companies to receive a third-party payment license for its Tenpay tool.
When contacted for comment, a spokesperson for Tencent pleaded ignorance of the situation, adding that it was unclear why WeChat would need a separate license to add payment functionality to the client. A member of the Tenpay team revealed that WeChat could launch payment functionality as early as mid-2013, and that payment licenses would not be an issue. The source added that WeChat billing for merchant partners is not a topic that falls under the purview of the PBoC.
A source inside Tencent hypothesized that as WeChat plans to move into O2O payment services in the future, its range of services could be expanded to include offline payments. Tenpay's services only cover online payments, and offline functionality - including QR code-based payments - would require other payment licenses.
According to the China Academy of Social Sciences' (CASS) 2013 blue paper on Chinese payment and clearing, released on April 16, Chinese online shopping payments totaled more than RMB 1 trln in 2012, a more than sixfold increase over 2011.
Keywords: wireless Tencent People's Bank of China third-party payment 0700.HK WeChat e-payment mobile IM
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