Tencent Holdings has given ground on China’s mobile payment battlefield by agreeing to integrate a key part of its user identification system with an industry latecomer, state-owned China UnionPay, reported Caixin.
The agreement challenges the duopoly of two of China’s tech titans, Tencent and Alibaba Group Holdings, by giving UnionPay a larger foothold in a market with more than 1 billion users. It would also get China’s central bank a step closer to a goal that it sees as necessary to developing the country’s fintech sector.
Tencent, which runs the ubiquitous messaging app WeChat, has agreed to work with UnionPay to integrate the QR code systems in their mobile payment platforms. The change would, for example, allow a merchant to accept payment from one customer using WeChat Pay and another using UnionPay’s QuickPass by presenting both with the same scannable code. Currently, merchants in most places have to offer different codes for each payment service.
Tencent and UnionPay, which runs the country’s bank card monopoly, have begun testing out the integrated QR code system on Android devices in Fuzhou, East China’s Fujian province.