China’s crackdown on technology companies that offer payment services had the unintended side effect of opening the lines of communication between competitors like Alibaba and Tencent, CNBC reported on Thursday (Dec. 2).
As mobile pay became the primary payment method in mainland China over the past 10 years, Tencent’s WeChat Pay and Alibaba’s Alipay, run by Ant Group, took over as the most popular ways to buy goods and services. Intense competition between the two payments firms meant that shoppers were locked into using the method associated with the eCommerce marketplace.
See also: China Imposes More Supervision Over Payments Ecosystem
With the ongoing crackdown by Chinese regulators and numerous changes on the table, the payment gates are expected to be swung open.
“As for payment, we also hope in the near future, in all places, users can freely choose. It’s also a show of fairness,” Lei Maofeng, vice-general manager of WeChat Pay, said at CNBC’s annual East Tech West conference in the Nansha district of Guangzhou, China.
He added that WeChat announced on Monday (Nov. 29) that people now have the capability to share links from external sites, even Alibaba’s Taobao. The practice had previously not been an option.
Read more: Uncertainty Surrounds PBOC Targeting of Alipay, WeChat Business Use of Personal Codes
Alibaba has several apps that have opened payment options to include WeChat Pay. However, Alipay is currently still the only payment choice on Taobao and Tmall.
Chinese regulators hit Alibaba with the highest penalty on record — $2.8 billion — for violating the country’s antitrust laws. China started cracking down earlier this year on alleged monopolistic practices by tech companies.
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Most of China’s 1.4 billion people use either Alipay or WeChat Pay to make mobile payments, and the Peoples Bank of China has previously said the digital yuan could be the backup to the established payments juggernauts.
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