Banks set to lose out in online fight

By MENG JING (China Daily) Updated: 2015-02-26 05:18

WeChat, now China's biggest instant messaging platform, is expanding its horizons and has become a primary e-commerce platform in its own right. [Provided to China Daily]

Services such as digital red envelopes forecast to attract more mobile payment users

Banks appear poised to become the biggest victims of the red-hot battle between Chinese Internet giants to lure new mobile payment users, according to analysts and insiders.

Spring Festival saw users fully embrace mobile technology to send digital red envelopes bearing cash gifts.

Although the popularity of these digital services cannot hurt the traditional banking industry directly, such online products can increase the growth of mobile payment users in China, according to Wang Weidong, a senior analyst at iResearch Consulting Group.

Wang said that with people becoming used to making payments through mobile devices, banks' consumer services are expected to be lost to third-party payment service providers, including Alipay and WeChat.

Wang cited customer services including cash transfers from one account to another and settling credit card payments.

According to WeChat, China's most widely used chatting app owned by Internet giant Tencent Holdings, 3.27 billion red envelopes were sent and received by WeChat users between Feb 18 and 23, with 1.01 billion of them exchanged online on Feb 18, Lunar New Year's Eve.

Chinese traditionally send red envelopes, or monetary gifts, during Spring Festival to bring good luck.

Alipay, China's largest online payment tool under an affiliate of Alibaba Group Holding, said more than 100 million of its users sent or received digital red envelopes during Spring Festival.

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