6 ms·

Lovely article, and a great introduction to the red envelope culture. But I think the real reason WeChat's payment system has taken off is much simpler: - Peo

Lovely article, and a great introduction to the red envelope culture. But I think the real reason WeChat's payment system has taken off is much simpler: - People pay for everything with cash - Sometimes you don't bring enough cash with you - Paying for each others' meals, sending red envelops, etc is a daily thing here - People don't have credit cards (so that whole technology has been completely leapfrogged, and why Facebook's money transaction haven't take off and we're stuck with our crappy CC system in the US) - Everyone and their mothers has a WeChat (I've never met anyone that doesn't... it's more ubiquitous than Facebook in the US) So even if you're not invested in the platform you'll most likely have some money on your wechat account just as emergency cash. And it's only true that you need a bank account if you want to take money out. For instance I don't have a bank account hooked up, but I have money on mine just from times when friends wanted to comp me for a meal.

20andup 10y ago
Another reason is that you get better deals paying with WeChat than cash. For example, you might get 20% off a meal if you pay with WeChat (or some other mobile payment like AliPay). This adds up very quickly.
50CNT 10y ago
From what I've read in a recent article, WeChat has 95% market penetration in Tier 1 cities, which is insane.
- barry-cotter 10y ago
  5% of people in Beijing/Shanghai/Shenzhen/Guangzhou don't have wechat? I suppose there are people who are still using QQ, but 5% seems high for wechat non users.
  - wingerlang 10y ago
    I'd imagine more than 5% of the population are too old/young to even use a smart phone.
  - optforfon 10y ago
    Infants, people in comas, and the severely disabled probably don't have wechat
rahimnathwani 10y ago
It's the existing social graph that's important. Some other points you made aren't the main drivers of success: People pay for everything with cash They also have bank cards and Alipay, and had them before WeChat payments existed. Sometimes you don't bring enough cash with you Yeah, and I used to use Alipay to reimburse friends, before WeChat payments. Paying for each others' meals WeChat doesn't help with that. It helps you pay for your own portion, as you can use WeChat to reimburse the person who paid the restaurant. People don't have credit cards I'm not sure that _credit_ is relevant. Everyone has a chip+pin bank card (what I'd call a debit card in the UK). People have been paying with bank cards in restaurants for many years. You made one point which is important: "Everyone and their mothers has a WeChat (I've never met anyone that doesn't... it's more ubiquitous than Facebook in the US)" But practically everyone has an Alipay account as well. The thing is, I have 100s of contacts on WeChat (which I added for messaging) but only 10-15 on Alipay. It's the existing social graph, not just the number of users, that's important.
- optforfon 10y ago
  I think that's simplistic. All of the points are important together Like I said, Facebook has the social graph and no one uses their payment system b/c 1 - you pay with credit cards and they're super entrenched and you don't forget your credit card like you may forget to bring enough cash 2 - at least personally... I rarely find I need to give my friends money in the US. It happens once in a while.. but not every week like in China
  - rahimnathwani 10y ago
    Sure, the social graph is not enough on its own. There's something different about China or its stage of development. But the specific points you raised mostly don't help us understand what's going on. (1) is incorrect, (2) applies even more in the US than in China, (3) is just wrong, (4) is irrelevant as people have bank cards. I say (3) is just wrong because: (i) WeChat doesn't facilitate paying for each others' meals; it only helps when splitting the bill, and (ii) red envelopes weren't a daily thing before WeChat. They were only for special occasions. Anyway, I think we can agree there are multiple factors that got WeChat payments to where it is. I'm not sure I have any additional insight :)

20andup 10y ago

Another reason is that you get better deals paying with WeChat than cash. For example, you might get 20% off a meal if you pay with WeChat (or some other mobile payment like AliPay). This adds up very quickly.

50CNT 10y ago

From what I've read in a recent article, WeChat has 95% market penetration in Tier 1 cities, which is insane.

barry-cotter 10y ago
5% of people in Beijing/Shanghai/Shenzhen/Guangzhou don't have wechat? I suppose there are people who are still using QQ, but 5% seems high for wechat non users.
- wingerlang 10y ago
  I'd imagine more than 5% of the population are too old/young to even use a smart phone.
- optforfon 10y ago
  Infants, people in comas, and the severely disabled probably don't have wechat

rahimnathwani 10y ago

It's the existing social graph that's important. Some other points you made aren't the main drivers of success: People pay for everything with cash They also have bank cards and Alipay, and had them before WeChat payments existed. Sometimes you don't bring enough cash with you Yeah, and I used to use Alipay to reimburse friends, before WeChat payments. Paying for each others' meals WeChat doesn't help with that. It helps you pay for your own portion, as you can use WeChat to reimburse the person who paid the restaurant. People don't have credit cards I'm not sure that _credit_ is relevant. Everyone has a chip+pin bank card (what I'd call a debit card in the UK). People have been paying with bank cards in restaurants for many years. You made one point which is important: "Everyone and their mothers has a WeChat (I've never met anyone that doesn't... it's more ubiquitous than Facebook in the US)" But practically everyone has an Alipay account as well. The thing is, I have 100s of contacts on WeChat (which I added for messaging) but only 10-15 on Alipay. It's the existing social graph, not just the number of users, that's important.

optforfon 10y ago
I think that's simplistic. All of the points are important together Like I said, Facebook has the social graph and no one uses their payment system b/c 1 - you pay with credit cards and they're super entrenched and you don't forget your credit card like you may forget to bring enough cash 2 - at least personally... I rarely find I need to give my friends money in the US. It happens once in a while.. but not every week like in China
- rahimnathwani 10y ago
  Sure, the social graph is not enough on its own. There's something different about China or its stage of development. But the specific points you raised mostly don't help us understand what's going on. (1) is incorrect, (2) applies even more in the US than in China, (3) is just wrong, (4) is irrelevant as people have bank cards. I say (3) is just wrong because: (i) WeChat doesn't facilitate paying for each others' meals; it only helps when splitting the bill, and (ii) red envelopes weren't a daily thing before WeChat. They were only for special occasions. Anyway, I think we can agree there are multiple factors that got WeChat payments to where it is. I'm not sure I have any additional insight :)