Mobile payments continue to make inroads across the globe. China is one of the core markets for this type of financial activity.
Following a partnership between Unionpay and Tencent Holdings, China’s mobile payments will enter the next stage.
UnionPay and Tencent Join Forces
The current plan is to unify mobile codes scanned by consumers to complete purchases. In turn, this will ensure the network gains a better position in the mobile payments sector.
Up until now, both companies use a different QR code system. This makes them direct competitors, which isn’t beneficial to either. Joining forces is a sensible decision to tackle the Chinese mobile payments market.
With this new system, customers of both Tencent and UnionPay can utilize the same smartphone symbols. Several field trials are being conducted to ensure this new integration works flawlessly.
Currently, the Chinese mobile payments sector is dominated by Alipay and Tencent. UnionPay has made inroads, but lacks the necessary traction to gain on those two competitors.
Customers using Quickpass or WeChat Pay can scan the same codes from merchants. So far, WeChat Pay has been the default payment solution on Tencent’s messaging platform.
Unifying Mobile Payments in China
This new collaboration will put a bit of pressure on Alipay. Despite its strong market position, competitors are now joining forces to take the crown. Interestingly enough, Alipay has no plans to integrate with other companies offering mobile payments.
It remains to be seen if the company can avoid such a fate for much longer. China’s EMVCo consortium wants to achieve global payments unification in the coming years. That also means unifying the mobile payment solutions available in the country.
Another option is to create a unified standard for mobile payments. The partnership between Tencent and UnionPay may be a first move toward that goal. China’s mobile payment industry has grown to $27 trillion. Fostering future growth will be crucial, by any means necessary.