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The collaboration between Tencent and UnionPay would allow merchants to accept payments from one customer using WeChat Pay and another using UnionPay’s QuickPass by presenting both with the same scannable code.
Tencent Holdings Ltd. and China UnionPay Co. announced they plan to bring together their mobile codes that users scan to pay for purchases. In that way, the Chinese central bank gets a much larger niche network inside the $27 trillion payments playground.
Both companies decided to consolidate their QR code systems so their users will be able to transfer or spend their assets just by using the same smartphone symbols.
However, from the companies, they didn’t want to elaborate. The Tencent representative said the company will be working with UnionPay but only on a trial basis while UnionPay declined to comment.
This teaming up could mean a lift for UnionPay in the first place since it needs to take a bigger part of the market. For now, the Chinese payment market is mostly dominated by giants such are Tencent or Alipay. This way, under the agreement, customers will be enabled to use UnionPay’s Quickpass or WeChat Pay. During the recent few years, Alipay came under the attack from Tencent’s rival offering.
AliPay Worried on Possible Libra Launch
It then called the Libra initiative “bold and radical” but also a “prudent and rational” move for the Silicon Valley giant.
It then said:
“Any internet company that has a relatively mature digital payment system, such as WeChat Pay and Alipay, would be threatened by the stablecoin if it is ever launched.”
However, it is already known that China’s central bank has been working on its own national digital currency for the past few years as well. In the same time, it is forbidding cryptocurrency mining and trading
Still, neither Tencent nor Alibaba has been involved in any known cryptocurrency or trading projects.
Alibaba Group said the company is strongly against crypto exchanges using their services as an entrance for Chinese customers’ “fiat on-ramp in a peer-to-peer fashion through over-the-counter trading.”
“WeChat Pay does not support crypto trading, and the platform has never been open to any crypto category. We welcome users to report on any crypto trading on our platform and proactively collaborate with authorities to crack down on such activities.”
Heavily Investing in Blockchain Technologies
On the other hand, while both Chinese companies claim they are against crypto assets, they are heavily investing in blockchain and cloud computing technologies.
Tencent TrustSQL platform is, for example, designed as a three-part system with the core chain layer, a product and service layer, and an application layer to provide digital asset management and authentication.
The company also led a $20 million Series A round in blockchain provenance startup Everledger in September last year.
About this new partnership, unnamed UnionPay employee said:
“QuickPass could start to disrupt the duopoly of Alipay and WeChat Pay once its number of registered users reaches somewhere between 400 and 500 million. We expect it to happen sometime in 2020.”
“Without incentives for the two giants to integrate their QR codes (with competitors), it will only hurt their market share. It will be hard to get them to go along with the policy, or at the very least they will drag their feet,” said one veteran regulator who wanted to stay anonymous as well.