China’s regulators have asked Tencent Holdings to reduce WeChat’s mobile payment market share just weeks after starting the digital yuan pilot in Hong Kong. This directive targets in-person payments via QR codes, not online shopping.
WeChat Pay, along with Alipay, dominates China’s mobile payment ecosystem. Despite over 185 non-bank payment institutions, the market remains concentrated. The push coincides with efforts to promote the digital yuan, which has struggled since its 2020 pilot.
Hong Kong residents can now top up digital wallets with up to 10,000 CNY ($1,385) through 17 retail banks. The market for mobile transactions is vast, hitting 92 trillion yuan ($12 trillion) in Q1, with QR code transactions at 15.59 trillion yuan.
By curbing WeChat Pay, Beijing aims to make room for the digital yuan, ensuring tech giants don’t overshadow this state-backed currency. This strategic move could reshape China’s financial landscape.
