East & Partners

Tencent set to expand WeChat Pay into Japan

(7 June 2016 – Japan) Chinese online behemoth, Tencent Holdings is working to roll out its mobile payment service at 10,000 Japanese stores by the end of 2016.

The move will allow Chinese travellers a convenient form of payment in the neighbouring country.

WeChat Pay, which boasts over 300 million users, allows them to pay via smartphone at 300,000-plus locations within China. Although only select Japanese stores have adopted to this point in time, Tencent plans to start wooing retailers in earnest with Japanese social data provider Hotto Link.

To have the feature functioning, stores only need to download an app to tablet devices to scan QR codes from customers' smartphone screens. China Construction Bank will be responsible for clearing cross-currency transactions.

Chinese constitute a quarter of all visitors to Japan, spending vastly more than other groups. Reports indicate the mainland tourists to Japan spend around 1.41 trillion yen (A$17.7 billion), accounting for 40 percent of consumption by all foreigners last year.

According to a Tencent spokesperson, the plan is to have 20,000 stores in Japan accept WeChat Pay as soon as possible. The firm hopes to catch established payment provider China UnionPay cards, which has already become a popular payment method among Chinese tourists in Japan.

Tencent has already expanded the service into other Asian countries including Thailand, Indonesia, and Singapore.

Younger Chinese handle a wide array of expenses with WeChat Pay, including taxi rides, convenience store purchases, and utility bills. The service also works with China's second-largest e-commerce platform, JD.com, in which Tencent has a stake. It is now widely accepted both online and in physical stores.

Additionally, the payment service will allow Japanese companies to advertise and offer discounts through Hotto Link on WeChat.

WeChat competitor Alipay, a subsidiary of Alibaba Group, is also looking at introducing its mobile payment service to the Japanese market in a similar fashion.