Alipay versus WeChat Pay: a 5-year battle between Chinese payment giants

This war will continue and will change our life landscape even more profoundly.

What makes people proud is that the ancient people have knocked on the door of an era; what is anxious is the fierce competition with the latecomers.

Nowadays, Alipay has created a mobile payment era. After experiencing a unique scenery, it is experiencing fierce competition with the WeChat payment competition. After five years of stifling, Alipay’s status has not become more stable because of the first-mover advantage, but the progress of WeChat payment seems to be not that big. This war will continue and will change our life landscape even more profoundly.

First, the mobile payment sprout

Mobile payments are known as the "New Four Great Inventions" (Editor's Note: Although this is a very absurd statement), the real widespread use in life is during the Internet O2O war. However, the earliest budding phase of mobile payments was in the late 1990s.

In 1987, the country was still in the stage of using the Chinese Yuan with food stamps. The banks were in the exclusive operation stage of the four major banks of "Industrial & Commercial Bank of China, Agricultural Bank of China, Bank Of China, China Construction Bank", and the domestic market-oriented financial system was almost non-exist. At this time, the earliest signs of mobile payments have been secretly sprouted. This year, China Merchants Bank was founded in Shekou Industrial Zone, Shenzhen. Although there are not many outlets of China Merchants Bank, it has invested a lot of time and energy in the field of science and technology. In 1995 and 1999, China Merchants Bank initiated the One Card and Netcom, and under the impetus of the central bank and the banking industry, One Card and Netcom became the standard for the Chinese banking industry: magnetic strip bank cards and online banking. So far, the domestic banking industry has completed the most basic information construction of the financial system, and laid the foundation for the birth of Fast Payment and the development of third-party payment in the future.

In 1999, China Mobile, the originator of domestic mobile payment, cooperated with financial institutions such as Industrial and Commercial Bank of China and China Merchants Bank to try some mobile payment services in Guangdong. This is the earliest domestic attempt to make mobile payments. This year, e-commerce first appeared in China, and 8848, Alibaba and other e-commerce shopping websites were opened. Mobile payment and Internet payment scenarios have taken shape in China. In 2002, China Mobile began the pilot of micro-amount mobile payment in Guangzhou, and the bank also began to pay for cooperation with mobile phones. However, due to the fact that hardware devices are not yet popular, payment operations are cumbersome, online shopping has not yet gained people's trust, and application scenarios are lacking, China Mobile's attempts have not been widely promoted. Overall, mobile payment has developed slowly.

Second, the pre-war period: Alipay alone

The dawn of mobile payment is really welcoming, and it is closely related to the rise and development of e-commerce. E-commerce appeared in 1998, but since the issues of trust, capital, and logistics have not yet been resolved, the development is not ideal. Until 2003, the massive outbreak of SARS, a infectious disease, gave e-commerce a time to rise. Because of the high rate of SARS infection, most people are afraid to go out if they are exposed to a greater risk of being infected. This status quo has stimulated the online shopping market, which was not ideally developed. And in the following time, e-commerce ignited, and since then, the era of Alibaba and Jack Ma has arrived.

The rise of e-commerce has made mobile payment as the underlying technology come into being, and now Alipay, which accounts for half of the mobile payment market, was born this year.

In 2003, due to the unevenness of the business on the e-commerce platform, the credit problem could not be solved. Alibaba launched Alipay to solve the payment problem of Taobao to solve the needs of online shopping users. Alipay launched a "guaranteed transaction" model, allowing buyers to confirm the satisfaction of the receipt of goods, only to the seller to the seller, thereby reducing the risk of online shopping. Initially, Alipay was only Taobao service, combined with Taobao's shopping scene, Alipay played the role of payment tool in Taobao, used to create a closed loop of e-commerce. And this attribute is still an important attribute of Alipay.

Alipay rooted in Taobao has its own application scenario from the beginning - online shopping, but after solving the trust problem, Alipay is not satisfied as a payment tool only. Ali's executives believe that Alipay should not be just an application tool, it should be a stand-alone product, and perhaps should become the basic service facility of e-commerce websites. Thus, in December 2004, Ali officially launched a third-party application platform, Alipay. At that time, Alipay mainly acted as a virtual account of the credit intermediary function, thus effectively reducing the transaction risk. In order to expand the use of Alipay, Ali launched the Alipay "full compensation" system in 2005, and began to reach strategic cooperation agreements with ICBC, ABC and other banks; at the same time cut into online games, airlines, B2C and other network higher The external market; it also gradually enters daily expenses such as water, electricity, coal and communication fees, and guides and educates users to use Alipay to complete payment online, thus cultivating consumers' usage habits. As of August 2008, the number of Alipay users exceeded 100 million, surpassing Taobao's 80 million users, accounting for 40% of the total number of Internet users, and Alipay's annual transaction volume of more than 130 billion yuan.

At that time, the mobile Internet was not as popular as it is today, with a coverage rate of only 200 million people. The mobile payment habits of domestic users have not yet been cultivated. At the same time, various payment methods such as online payment, mobile payment, NFC payment, and SMS payment coexist.

At the same time as the development of Alipay, China UnionPay and China Mobile, which have the background of state-owned assets, also started the layout of mobile payment. In 2005, China UnionPay, which was established just three years ago, set up a special project team to track and study the development of NFC. The following year, UnionPay launched a mobile payment solution based on financial IC card chips. At the same time, mobile operators represented by China Mobile also had their own mobile payment product solutions. Around 2009, China Mobile and UnionPay have launched pilot mobile payment services in some provinces and cities. Even earlier in 2010, we learned about the wave of mobile Internet and invested a lot of manpower and resources for R&D, operation and promotion. Compared with third-party payment, China Mobile has a first-mover advantage, and has a brilliant "Monternet" business and a monopoly payment channel. It is a pity that when China Mobile promoted mobile payment, it was not familiar with the mobile Internet. For example, the mobile phone Tongbao business mentioned in the article "Huaxia Times" is an e-commerce application that can "pass the authentication" on the PC side and the mobile end, and bind the multi-account "Alipay".

Alipay or WeChat, which is well known to the public today, is the same as many application payment methods. The difference is that the mobile phone Tongbao has two card carriers and two software carriers at the same time. In the face of merchants, in addition to the traditional POS terminal, there is a small read head hardware carrier. Hardware selection, negotiation cooperation and hardware upgrades will inevitably consume a large amount of manpower, material resources, financial resources and time. On the one hand, the hardware upgrade cost is much higher than the cost of the software; for the user, the threshold for replacing the hardware is higher than the cost of downloading and using the client, and the choice of hardware and software technology, China Mobile has been swinging; on the other hand, if relying on the hardware segment to obtain users, the threshold for user acquisition is high; at the same time, due to technical reasons, the Chinese mobile menu operation mode is more difficult, and there is a lack of user experience. Therefore, China Mobile was opened by Alipay and later WeChat payment. Even if China Mobile Group unveiled the "China Mobile and Package" and NFC mobile phones as the entry point for mobile payment services in the later period, it did not have a big impact on the overall situation.

When the mobile payment attempt in the state-owned background was caught in the stranding period, the Alipay paid by the third party continued to grow and develop with the entrance of the e-commerce shopping scene, and gradually became a big one in the field of mobile payment.

In 2010, the trading volume of Taobao Tmall reached a billion level. Users online shopping should jump to e-banking, and they need tools such as password card and U-shield. The process is cumbersome and the success rate of payment has been 80%. In order to change this situation, Alipay has opened Fast Payment, and now the payment success rate remains above 98%. This is the biggest game between Alipay and the bank. It is fully connected to Alipay. The bank is also worried that its brand of online banking will be replaced by Alipay. After all, at that time, "the account holder has the world". But in partnership with third-party payment companies, banks can get more deposits, and deposits are the lifeblood for banks. Regardless of the bank's main will, Alipay has opened a direct channel to the bank. Alipay’s move transcends the times, making it no longer a simple function like the Taobao cashier, but providing a complete payment experience like "Bank + UnionPay".

At the same time, Fast Payment has become a key node in the development process of Alipay and third-party payment. This behavior laid the foundation for the rapid development of third-party mobile payment, and also a milestone in the history of China Mobile Payment. At the same time, it further established Alipay's status as the third-party payment company directly connected with the bank. In addition, Fast Payment has set a new standard for the entire third-party payment industry in a certain sense. Since then, WeChat payment, Jingdong wallet, Baidu wallet, etc. have established a capital flow channel with the bank under this standard; if there is no Fast Payment, There will be no Internet financial products such as QR code payment and Yu'eBao.

The existence of Fast Payment, connected with third-party payment and bank, provides a prerequisite for Alipay to have financial attributes after the tool attributes. At the same time, this move also promoted the use of Alipay by C-side users. In the end, the Fast Payment, and at most one night, Alipay bound millions of bank cards. As of December 2010, Alipay users exceeded 550 million.

The high revenue brought by the third-party payment platform has attracted many companies to join. With the arrival of players from all sides, in June 2010, the People's Bank of China promulgated the "Administrative Measures for Payment Services for Non-financial Institutions", May 2011, 27 companies, including Alipay, Tenpay and Epro, received the first batch of third-party payment licenses issued by the central bank. Up to now, the central bank has allocated 8 wholesale licenses. At present, the number of payment licenses registered by the People's Bank of China is 267. Later, with Alipay launching the first payment solution for QR code applications, consumers and merchants traded through Alipay barcodes, without the need for bank cards, the development of offline payment network, and the gradual popularization of smartphones. The mobile payment began to shift to the offline, and the Internet, which was dominated by the PC, began to develop toward the mobile terminal. Before getting the license, Alipay also used SMS, voice, client software and other methods to get involved in some mobile payment services, but it was not mainstream.

At the beginning of 2013, the vast majority of Alipay's 600 million users were on the PC side, while the mobile payment Alipay APP had only 1 million active users and 10 million stock users. At that time, the active functions were only transfer, credit card repayment and mobile phone recharge; how to transfer users from the PC to the mobile? The way Alipay faces this problem is simple and violent, and the PC-side transfer charges are free. Although this move caused a strong rebound of users, from the data point of view, the end user still flows from the PC to the mobile. People inside Ali commented: "Alipay's action is faster than Taobao."

This year, Alipay was able to develop another heavy weapon, Yu'eBao was on the line.

In June 2013, Yu'e Bao was launched. The annualized rate of return exceeded 6%, and it was of the nature of a money fund. Because of this, the account balance of Alipay users flows into the balance. However, in 7 months, the amount of balance and the number of users have increased by 50 times. From the PC to the mobile side, Alipay has changed from a transfer tool to a "management tool". The birth of Yu'eBao is a sign of the rise of Internet finance, and at the same time created a miracle of the money fund. Therefore, Alipay is in the name of the pioneers, explorers and innovators of the third-party mobile payment market. After that, Alipay obtained the fund's third-party payment license and began to dock the fund company. This added a layer of financial attributes to Alipay on the basis of payment instruments. This financial attribute is also an important reason why Alipay still occupies half of the third-party mobile payment market in the wake of the rise of WeChat payment and the momentum. Because of the birth of Yu'eBao, it not only relieved the risk of bank reserve, but also attracted a large number of users to download Alipay APP to purchase balance treasure on mobile phones. In October 2013, but within a few months, Alipay added more than 100 million users. At the same time, the expansion of the scan code payment online was rolled out. Its scanning code payment areas cover aviation, travel, games, group buying, B2C industry and other industries. According to a data released by Alipay in November 2013, its scanning code coverage area reached 460,000 merchants.

After nearly 10 years of development and improvement, Alipay is almost single in this field, so that Jack Ma issued a rhetoric that "I just can't find an opponent with a telescope."

Indeed, before the rise of WeChat payment, as the forerunner of the third-party mobile payment market, Alipay is a big one in this field. It can even be said that Alipay's development history is a short, unfinished history of China's third-party payment industry. Alipay is developed along the trajectory of China's third-party payment industry. It is a pioneer in this field. Mobile payment is the door to this new era. Alipay has changed banks, and changed people's spending habits.

In the period when Alipay became the leader of online payment, Tencent also had a third-party payment license, Tenpay. Although this third-party payment brand is the second in the market, its sense of presence is not high, and its popularity and market share cannot be compared with Alipay. It is difficult to threaten Alipay's dominant position in the third-party mobile payment market. According to an Ai Rui report, in 2014, Alipay's mobile payment market share was as high as 82.3%, and the second Tencent Tenpay was only 10.6%. From the market share, Alipay and Jack Ma have such a conviction. Alipay’s leading edge does not seem to be unshakable, and the surface is infinite. But in fact, the market is not stable, and WeChat payment and QQ mobile payment are growing rapidly.

In the PC era, the third-party mobile payment led by Alipay was the only one in the online payment, and Alipay was the only one in the third-party payment; but the arrival of the mobile era made the unfavorable Alipay have a sense of crisis before dawn, because WeChat the rise of payment has broken Alipay's position as the only pioneer, explorer and promoter in the field of mobile payment, and with the increasing power of WeChat payment, the pattern of who is dominated by mobile payment is still unknown.

In the era of change, challenges and opportunities have always coexisted. Especially after WeChat successfully copied qq to the mobile terminal, it launched the WeChat 5.0 version, added WeChat payment and other functions, and began commercialization.

Third, the fierce battle period: WeChat payment strong rise

Since 2004, the promotion process of Alipay has represented the promotion process of mobile payment for a long time. On the basis of education market and education users, Alipay's position in the mobile payment market is like Taobao's position in e-commerce. The same, occupying an absolute first-mover advantage. Alipay's momentum is fierce, and other third-party payment peers are far behind, so Alipay has long dominated China's mobile payment market. But by the end of last year, Alipay's market share was about to fall to half, and WeChat's market share rose to more than one-third.

Before the launch of WeChat payment, Tencent’s third-party mobile payment market was in the hands of Tenpay. Founded in 2005, Tenpay is similar to Alipay's establishment, but WeChat's Tenpay is farther away from social and distance payment scenarios, although it ranks second in the mobile payment market share, but compared to the ranking For an Alipay, it’s a far cry from the Alipay. At that time, TenPay only guaranteed the normal operation of the Tencent e-commerce platform transaction settlement. After leaving the Tencent e-commerce business, the role of Tenpay is limited to rushing QQ coins, renewal of various yellow diamonds, blue diamonds, etc. It can be said that the sense of existence is not strong.

When the market share of payment has long depended on e-commerce transactions, Tencent tried several times to enter the e-commerce payment scene, for example, PaiPai, QQ Shopping, etc., but the record is not good.

Most startups don't have the extra time to do third-party payments, including taxi software, this situation provides a payment portal for scenarios other than e-commerce scenarios for mobile payments. Tencent realized that the QR code is the key to connect online and offline. At this time, the QR scanner designed in WeChat has come in handy. By scanning the QR code information, with WeChat 5.0 version, the WeChat payment is added in this version.

On January 26, 2014, Tenpay launched a public account "New Year Red Packet" on the WeChat public account, which mimicked the traditional gift method of the Chinese during the Spring Festival. Users can send or receive red packet to their friends. Once launched, this function is active in the WeChat group in a viral-spreading manner. During the Spring Festival, there were more than 5 million users participating in the New Year's Eve, and the number of red packet received reached 16 million. This data validates the user base of the WeChat red packet. After the small test of the Spring Festival in 2014, WeChat paid in cooperation with CCTV Spring Festival Evening in 2015, which made the WeChat red packet product into an explosion phenomenon. At the same time, WeChat and the external companies launched a "Shake" to grab the red packet. According to statistics, on the night of New Year's Eve, WeChat had a total of 20 million users, and the total number of red packet received exceeded 1 billion, 62 times that of 2014. Thus, under the catalysis of the red packet, the amount of WeChat bank cards binding increased exponentially. Because users who receive red packet will choose to withdraw cash, it will naturally trigger the bank card binding behavior. Therefore, after the Spring Festival of 2015, relying on the WeChat social relationship chain to allow customers to learn and disseminate spontaneously, and the popularization of the payment form of WeChat red packet, WeChat payment successfully completed the cold start, and WeChat bank card binding account successfully broke 100 million, far less than this time of Alipay accumulates the same size users, accumulating initial payment users and account funds.

WeChat red packet completed the work that Alipay spent 10 years in one night. It was called "Surprise attack on Pearl Harbor" by Jack Ma. The Spring Festival red packet war was the beginning of the rise of WeChat payment. The Spring Festival red packet war not only allowed WeChat payment to gain market share in the mobile payment market. It also established a position in WeChat payment in the mobile payment business, and also on behalf of the mobile payment market from the era of e-commerce dominated to the era of social-oriented.

In the three years before the emergence of WeChat payment, that is, between 2008 and 2010, the transaction amount of third-party payment in China has exceeded 100% for three consecutive years. In addition to Alipay and WeChat payment, third-party payment the battlefield is equally fierce. Although the market share is not comparable to the two giants, mobile payment is an area where Internet companies want to share a piece. After all, no one wants to give their user data, user habits and user portraits to others. Therefore, the Meituan group spent a large price to purchase a payment license issued by a third party. In addition, companies such as JD.com Wallet and Baidu Wallet are also stepping up their pace. However, they do not have the power of Alipay to step on the policy red line to "expand the territory", and the number of Tencent socializement that is supported by WeChat payment is very large, and it is difficult to expand users by a single payment scenario. At present, in the field of mobile payment, WeChat payment and Alipay add up to more than 90% of the market share. Although Apple relies on mobile phones and other mobile devices to have some advantages, Apple Pay was officially launched in China in 2016. It started too late. Market share and user habits have been controlled by WeChat payment and Alipay. It has been difficult to shake the two in mobile payment.

In December 2013, Alipay first cooperated with Kuaidi to promote mobile payment functions. In January 2014, Didi and WeChat payment cooperation. Since then, the two sides have started a subsidy war. Alibaba and Tencent respectively subsidized more than 1 billion yuan to subsidize consumers by investing in their own taxi software to cultivate users' mobile payment habits. As a result, between Kuaidi and Didi, a billion-level subsidy was launched. On the one hand, the online car is competing for market share. However, for Alibaba and Tencent behind it, it is competing for mobile payment users and market share. Behind the subsidy is competing for consumer payment methods. Once the habit is formed, the user retention rate is naturally high.

In the payment scene of taxi, the merger of Didi and Kuaidi ended temporarily. In June 2015, Didi and Kuaidi opened up a dual platform, compatible with Alipay and WeChat payment, and the two divided the payment scenario, and other competitors could hardly enter. Alipay and WeChat payment have not stopped in the battle for payment scenarios. The network car is just the beginning, and this war has gradually entered a fever in the future development. Interestingly, it is difficult to see other third-party payments in a highly competitive payment scenario.

The QR code payment of WeChat payment is entered into the market by taxi software. Compared with NFC payment, QR code payment is a payment scheme based on the account system. It involves almost no hardware equipment modification, and there are few industry participants, and it is easier to reach an agreement. More importantly, Alibaba and Tencent's subsidies on taxi software have made the market situation open quickly.

At the time of the rapid development of Alipay and WeChat payment, the policy suddenly tightened.

On March 14, 2014, a letter entitled "Suspending the payment of Alipay's offline barcode (QR code) and other business opinions" appeared on the Internet. The central bank has doubts about the security of the two-dimensional code payment, and it is necessary to wait for the security verification. The joint Ministry of Industry and Information Technology suspended the offline QR code payment service. This document requires a comprehensive evaluation of offline barcode (QR code) payments, virtual credit card compliance and security. Soon, the authenticity of the document was confirmed and triggered the attention of public opinion. Although the central bank banned the offline payment method based on QR code, due to the huge attractiveness of the offline payment market, Alipay and other institutions have not stopped exploring the offline payment market, and continue to pay for the technical model of QR code payment. Security is improved and business is constantly being tried. In July of the same year, Alipay restarted the QR code payment in a low-key manner and promoted the subsidy in Shanghai.

In August, WeChat Payment also launched the function of "face-to-face collection of money" to restart the QR code payment. However, the previous active two-dimensional code payment was converted into passive two-dimensional code payment at this time, that is, from the original customer scanning the merchant's QR code to the customer generated two-dimensional code, and then the merchant handheld POS terminal scanning Read. The change in the scanning method has greatly improved the security. In this regard, regulation has maintained a tacit attitude.

After the bondage was broken, Alipay and WeChat paid, and the battle between the two payment giants continued.

According to Analysys data, Alipay accounted for 74.92% of the mobile payment market share in the first quarter of 2015, and Tencent's Tenpay accounted for 11.43%, which together accounted for 86.35%. However, with the rise of WeChat payment, two years later, in the first quarter of 2017, Alipay’s market share accounted for 53.7%, and Tencent Tenpay accounted for 39.51%, accounting for more than 90%. This set of data shows that a large part of the increased market share of WeChat Pay is eroded from Alipay's market share. Behind the increase in market share, it must be a fierce competition of "come and go".

Then the 2016 and 2017 Spring Festivals witnessed the continuous outbreak of red packet. Nowadays, red packet have penetrated into every aspect of people's lives, and various holidays are also the peak of red packet. Today, the red packet has become a social game, and it is often used to activate the atmosphere in the group.

The WeChat red packet can be quickly spread and has a strong relationship with simple operation and social interaction.

The form of red packet has gradually evolved into a kind of "social game". High-frequency, daily, simple, entertaining and game-like make the red packet thing on the mobile payment battlefield, making a great contribution to WeChat payment. The Spring Festival red packet war is a triumphant battle for WeChat payment, and it provides the possibility of a battle with Alipay on the battlefield of mobile payment for WeChat payment. In addition, the rise of WeChat payment also depends on the outbreak of the WeChat public account. The WeChat public platform is based on a phenomenon-level "explosion" of WeChat. With the huge energy of WeChat public account, WeChat payment is further popularized among users' usage habits. The rewards in the WeChat background, the attached micro-stores, and the third-party malls attached to the background all contributed to the growth of WeChat payment to a certain extent.

When the market share of WeChat payment increased significantly, it caused more or less pressure on Alipay's market position.

According to data provided by the third-party data monitoring Yiguan, by the fourth quarter of 2016, the market share of WeChat payment also increased from 11.43% in early 2015 to 37.02%, and Alipay decreased from 74.92% to 54.10%. Since December 2013, WeChat Payment has started a series of taxis and started a series of offensives in the field of mobile payment. However, in a few months, WeChat has made WeChat red packet based on social portals and high-frequency scenes of travel spread rapidly. WeChat have made a big step in the completion of WeChat payment. The amount of WeChat’s bank card binding is also from low to negligible, became the director of WeChat payment product operation, Huang Li said, "It has become a party prince, no longer afraid of compititors."

During the period from 2014 to 2016, Ali restarted the koubei.com, and Alipay began to access offline consumption scenarios. Strategically speaking, Alipay is still in the lead. However, in the process of the rapid rise and development of WeChat payment, Alipay has had problems in the integration with Word of Mouth. According to Caijing magazine, when WeChat paid for the rapid development of the "Spring Festival Red Packet War", "there were many wrong decisions, such as the positioning of word of mouth, such as the pursuit of user retention time, such as the neglect of small and micro businesses. An Ant Financial executive told the Caijing reporter. In order to avoid the price war like dripping and fast, Alipay has always wanted to be led by itself in the initial offline expansion, and mainly develops its own business through its reputation. "In the internal view, the two biggest mistakes affecting Alipay are the positioning of word-of-mouth and the development of socialization, which reflects the deviation of Alipay's understanding of the payment business." The ant executive said.

In addition, Alipay, which has always been the absolute No.1. After the market share fell, Alipay made a less sensible decision: Alipay began to socialize and community. In July 2015, Alipay launched version 9.0. In the first-level page, there were "business" and "friends" channels; however, from the results, everyone was not willing to pay for Alipay’s social dreams, so Alipay When the version is released, it is called "copying WeChat, copying Dianping."

In addition, in the face of 2016 Spring Festival WeChat red packet, Alipay absorbs the amazing performance of WeChat red packet in communication and interaction. Alipay also hopes to add social attributes to its red packet. As a result, Alipay launched the Wufu activities during the Spring Festival, and cooperated with channels such as TV stations and merchant brands. As far as the momentum during the Spring Festival is concerned, the two are equally divided. In addition to receiving Fuka, the Wufu activities can be presented by friends. In order to collect Wufu, many people publish information in WeChat group, post bar, and Weibo. Even so, the "Dedication Fu" of Wufu is still hard to find, and even some people buy "Dedication Fu" on Taobao for hundreds or even thousands of prices. On the one hand, the scarcity of "Dedication Fu" is to let everyone actively forward and spread. On the one hand, many new users have been registered to receive "Dedication Fu". This is such a scene of red fire is only a temporary trend, want to affect the user as long as the WeChat red packet, is afraid it is not enough. "Hatred of Dedication Fu" has once become a joke of the Internet.

Since then, in July 2016, Alipay 9.9 version was released, and someone compared the new version of Alipay's homepage with the Facebook homepage screenshot. "On the homepage, posting dynamics, friend recommendation, and information flow display methods are basically the same." Some people say: "Alipay is socializing, just be a 'near rich person' function". Unfortunately, Alipay tried to socialize, but was not allowed to enter. At least, the activities of the New Year’s Eve have not fulfilled the original intention of Ali. After all, socialization is not just driven by interest.

The innate advantage of WeChat social is difficult for Alipay to copy, just like e-commerce in Tencent. WeChat's strong social chain, interaction and diffusion among people are lacking in Alipay. After all, WeChat exists because of the bond of social relationships. It will integrate functions such as communication with friends and red packet, and Alipay is a payment tool.

After WeChat relied on strong social attributes to win, Alipay had a stronger desire for socializing. Naturally, the original attribute of Alipay as a payment instrument makes it at the end of the closed loop. It’s not that easy to socialize.

In addition, if the previous social attempt is just to make Alipay not achieve ideal results in social aspects, no harm, then, on November 26, 2016, Alipay circle function assault published, Alipay in terms of it, it is a great injury, even a stain. "Campus Diary" and "White Collar Diary" only allow invited women to release their status. Faced with a lot of photos that stimulate hormones, appearance really earns eyeballs and attention for Alipay in an instant. However, the content which is large-scale and vulgar makes public anger and discontent of Alipay, this is far more than the positive impact of the payment circle, and even nicknamed by netizens as "Ali procuress". Moreover, comments and rewards are limited to users with Ant credits of 750 or more, and the general public can only watch, which is contrary to the essence of social. The opening of "Campus Diary" and "White Collar Diary" was only opened for a few days, and Alipay closed the "Campus Diary" and "White Collar Diary". After all, a serious financial property payment tool, in any case, is inappropriate to relate to large-scale vulgar content.

Finally, the matter ended with an apology from the chairman of Ant Financial, Peng Lei. This incident has had a very bad impact on Alipay, and it can even be said that this is a horrible. After the circle event, the data showed that Alipay's market share reached a record low of 55.4%, and Tenpay reached an all-time high of 32.1%. This incident made Alipay abandon social and choose to return to business and finance after experiencing many chaos in the pursuit of socialize. Or it is also proved from the side that in the next mobile payment battlefield, the social property may continue to occupy a clear advantage.

At present, the advantage of WeChat payment social attributes is still continuing.

Fourth, the second stage of Guild Wars: Alipay's counterattack

In fact, after the WeChat red envelope got hot, the mobile payment closed loop of WeChat payment did not really form. The money in WeChat is more on the WeChat platform, and there is no closed loop for payment.

What really makes mobile payment cover offline is a small QR code. In this matter, it fully reflects the ubiquitous influence of WeChat. The two-dimensional code is not a new technology, but Tencent is very clever in using this technology to allow WeChat to scan various information. With the camera of the mobile phone, Chinese people can use the QR code to exchange contact information or download coupons. When Tencent added the WeChat payment function, the QR code became a convenient way to send and pay. As Ma Huateng said, "We have changed WeChat from the connection between people to the connection between adults and services."

Even if the central bank called emergent stop out of risk concern, it still cannot stop the crazy expansion of the QR code. The war between Alipay and WeChat payment began to break out and entered a feverish battle: the battle for O2O offline scenes. Because in the O2O model, payment is an important step in helping to close the closed loop of the transaction. High-frequency, small-paying payment scenarios, low barriers to entry, and high user demand are excellent opportunities to develop payment habits and enhance user stickiness.

Compared with online Alipay, which has the advantage of natural scenes, offline is a relatively fair arena for Alipay and WeChat payment, but the characteristics of scattered and infiltrating offline scenes determine that this is destined to be a hard battle. From the red envelope launched in 2014 to pull users to bind credit cards, to the scene of O2O and small merchants, the advantages of small amount and high frequency have been exerted, and the payment habits of users using WeChat payment have been cultivated. WeChat payment, through WeChat's huge installed capacity and understanding and investment in offline consumption scenarios, bypassed the already mature e-commerce online main battlefield, through the offline encirclement line, the high-frequency counterattack share of the road, the online penetration rate Gradually increase the formation of counterattacks, and finally grow to challenge and even crush the status of Alipay.

The battle for offline payment scenarios began with the network car, and then gradually spread throughout the O2O field. Today, the war continues and continues into the new retail space. From the second half of 2014 to the second half of 2015, the growth rate of the O2O market has exceeded 50%. Tencent led a series of O2O companies represented by Didi, 58 home, in addition to financial support, but also access to the WeChat wallet Jiugongge app portal, and provide WeChat payment support. After taking a taxi, Ali and Tencent all bet different companies in various fields such as group purchase, take-out, travel, life service and transportation. For example, in the field of group purchase and take-out, Tencent bet on the Meituan, Ali invested in the Dianping; when the Dianping were merged by the Meituan, and the Meituan turned to the Tencent department, Ali restarted the Koubei, and acquired Eleme, complementing offline life scen. This also shows from the side that the O2O payment scenario plays an important role in the payment portal.

As far as the O2O battlefield is concerned, there is no big difference between the two sides. The fierce competition is more like a "hand-to-hand combat." The market share of Alipay and WeChat payment will increase slightly. For example, after the payment market share reached 37% in 2016, WeChat paid a small increase, and the market share in the quarter remained basically at 38%~39%. There was a slight increase or fall between the quarters. However, this Does not affect WeChat payment in the mobile payment market second place and gradually close to the first Alipay 53.76% market share. Among them, after the first quarter of 2017, according to the fourth quarter of 2017 released by Analysys, the market share of WeChat dropped from 39.51% to 38.15%. In contrast, Alipay rose from 53.7% to 54.26%. The small increase and fall between the two shows that the mobile giant's double-chip structure is difficult to change in a short period of time. It also shows that the competition between WeChat and Alipay is in a stalemate in the field of mobile payment.

In the same period, Alipay is more inclined to expand the offline merchants to complete the payment scenario by installing the POS terminal, instead of relying on the QR code to obtain the offline entry. However, the threshold and cost of scanning code payment is much lower than that of POS payment. For small merchants, it is obvious that the former is more attractive. In this move, Alipay's actions are much slower. Until 2017, Alipay began to promote the "collection code" for small and medium-sized merchants, delaying the aggressiveness of WeChat payment online payment.

From the current point of view, the competition for offline scenes has a slight advantage for WeChat, because the offline scene has an obvious feature: small, high frequency. For a long time, Alipay has served as a payment tool. While Ant Financial is gradually becoming stronger, its financial attributes are also obvious. Therefore, most people use Alipay in the case of large amounts of money transfer, exchanges, etc., and there are not many small payments. The Alipay channel is more of a B-end. Under such circumstances, the scenario of offline micropayments gave WeChat opportunities. Secondly, in the field of micropayments, WeChat actively promoted the function of scanning QR codes. For buyers and sellers, as long as there is a simple QR code, the transaction can be completed. The sweep function has been popularized. WeChat is launching. The "Scan QR Code" feature was introduced before the payment function.

Alipay, as a national-level APP alongside WeChat, still has an advantage in merchant promotion, but it has gradually lost to the WeChat payment supported by the social relationship chain in the payment scenes such as selling aunts and other end markets. Scanning code payment has gradually become the most common payment method down to roadside vendors to star hotels. More importantly, WeChat Pay allows small and micro-businesses with non-development capabilities such as fruit stalls to experience payment notifications, simple reconciliations and other services, enjoy the benefits of mobile payments, and help businesses better manage their stores. It is these two-dimensional codes that can be seen along the street, so that we can gradually abandon the wallet, from eating, shopping, watching movies, shopping in the vegetable market to taking the bus and subway. The consumption scenarios that you can think of can basically be solved by WeChat payment. With the continuous efforts of WeChat payment and Alipay, the QR code has finally been recognized by the central bank. On August 3, 2016, the Payment and Clearing Association issued the "Bar Code Payment Service Specification" (Draft for Comment) to the payment institution. This is the first time that the central bank officially recognized the payment status of the QR code after stopping the QR code payment in 2014.

From the market share data, it shows that Alipay's market is indeed being eaten by WeChat a little bit. WeChat payment took only 3 years, and the market share reached 40%. It is a giant in the field of mobile payment along with Alipay. Regardless of whether it is the online market or the offline market share, the step-by-step approach of WeChat payment has made Alipay a mess, so that in some decisions, it is not deep enough. WeChat payment began to bid for Alipay in full-service payments, and began to slowly fill the financial services shortcomings. The micro-lending benchmarks and the wealth management benchmarks, the zero-credit and Tencent credits are also coming out.

In the face of aggressive WeChat payment, Alipay seems a bit flustered. It began to attack, and played a red envelope war, hoping to recover lost ground.

In 2017, Alipay launched the game of "making red packet". Frequent friends of WeChat group often encounter the following scenes: throw a QR code, the big word "scan code to receive red packet", or what red envelope password. Different from the past, this red envelope is still a red envelope. You can receive the red envelope and share your red envelope password to let the small partner receive the red envelope. When the small partner receives the red envelope, you can also get a certain amount of bounty. The form makes up for the weakness of Alipay's lack of social attributes. In order to obtain more bounty, users keep sharing their own red envelope passwords, and some people even try their best to show the red envelope password in the usual social behavior. This small move is like a WeChat red envelope, with a certain degree of communication. In the face of Alipay's subsidies, WeChat paid a "shake-to-get-free-bill" card, but the WeChat payment subsidy is obviously not as good as Alipay. In terms of user satisfaction and communication intensity, Alipay is slightly better. It is only due to the limitation of the payment scenario, this move enhances the interaction and communication between the user and the user. However, compared with the social interaction, the advantage of this move is still temporary, which is released from the 2018 issue of Analysys. The data in the first quarter can be corroborated, Alipay's market share fell back to 53.76%, and WeChat payment market share rose to 38.95%.

According to the data provided by Analysys, in the fourth quarter of 2017, the total amount of comprehensive payment was: 49,663.44 billion yuan, and the total amount of Internet payment was 6,969.724 billion yuan. Then the total amount of offline payment can be calculated as: 429,637.16 billion yuan. The offline is still the main battlefield, and the share under the line is as high as 86.5%. It can be seen that offline payment is the home court, because losing this part means losing the whole market. This can also explain to some extent why from the beginning of 2015, both sides have stepped up the "burning of money". For example, in August, Alipay and WeChat paid both launched cashless discounts. When WeChat Pay launched the "Cash Free Day" on August 8, Alipay set the entire August as a cashless month.

The rise of WeChat payment is definitely not just the accident after the "red envelope war", but the mobile Internet era, the inevitable mobile social gene that WeChat has after successfully copying QQ. No APP has more active users than WeChat, and it is difficult to have an APP that rivals WeChat's active and complex social chain. This can be confirmed by the rise of WeChat payment and the social attributes on which Alipay is threatened. Indeed, WeChat payment has changed the genes of mobile social. If Alipay opens the door to mobile payment, it is a pioneer; and let third-party mobile payment have financial attributes; then WeChat is the one that maximizes mobile social payment, and this property is still extremely excavated.

From the first quarter of 2013 to the first quarter of 2016, the market share increased from 5.1% to 38.3%, achieving rapid development. Since 2017, although the market share of Alipay and WeChat has seen a slight ups and downs, the market share of WeChat is gradually increasing, while the market share of Alipay is decreasing year by year. There are many factors that lead to this result. There are different market reactions between the two sides in the process of competition, and also related to the difference between Alipay and WeChat. For example, some people say that if WeChat or Alipay choose one, Alipay may be uninstalled, because Alipay can also use WeChat to pay, without WeChat, do you want to use a mobile payment software to chat, I am afraid most people the answer is negative. In this regard, Alipay is more like a tool, the end point of the entire ecology; Alipay's wallet positioning more reflects the strong tool attributes, users will open the Alipay when they have financial needs such as payment and financial management. Although Alipay has been working hard in social and entertainment, and hopes to broaden the user's usage habits, the results are not ideal. Instead, WeChat payment, which is positioned on WeChat, is a lifestyle, is more like a platform and is malleable. Based on the social relationship chain, it gradually evolved into an ecosystem that connects people, hardware and services. This can be verified from WeChat can continue to incubate in different directions such as WeChat public account, WeChat payment, and small program.

The competition on the mobile payment market share is still going on. WeChat payment will not exceed Alipay's market share. Whoever loses it is still unknown. The only sure thing is that from 2013 to the present, relying on the huge user group of WeChat, WeChat payment development momentum is rapid, although still inferior to Alipay, but the gap with Alipay in the third-party mobile payment market is getting smaller and smaller. It's just that compared to the status of Alipay's powerful tool attributes, the WeChat platform, which may be dedicated to building a lifestyle, can run faster in the next competition.

Today, the O2O market has entered a relatively mature period, and its growth has slowed down. However, it is still rapidly improving to find a new round of high-frequency and small-scale scenarios in a period of rapid growth and continuously improve the penetration of Alipay and WeChat payment in all aspects of daily life.

Therefore, after the dispute between the Internet and the O2O, the dispute between Alipay and WeChat payment spread to the areas of shared bicycles and offline retail. Such as Didi, fast after the sharing of bicycle disputes, Xiaohuang car, Mobai, including Haro bicycles, there are also traces of payment scene disputes behind the betting. In addition, in the field of O2O retail, Tencent and Alibaba are also at the same time, it is no accident. Although Tencent calls it "smart retail", Alibaba calls it "new retail", but behind it is also the competition for offline payment cut into the scene entrance. At present, Tencent's services are mainly around WeChat, one is the public number, which can facilitate brands and enterprises to reach consumers through WeChat; the other is small programs, which are not required for light applications inside WeChat. Too many development resources are invested, and users are not required to download separate applications. And Alibaba's new retail concept is the combination of offline stores and online. In the presentation of real life, that is no-cashier supermarket. In July last year, Ali's unmanned supermarket began public beta in Hangzhou. From entering the store to shopping and leaving the store, each guest will be separately identified and complete the automatic debit payment of Alipay. The IoT payment technology behind it shows a unique sense of technology. With the maturity of biometrics such as fingerprints, brushing faces, irises, sounds, and finger veins, the password itself seems to be out of date.

In addition, non-payment technologies such as blockchain , virtual reality, and the Internet of Things are also looking for entry-entering payment industries from cross-border large-value remittances, online shopping, and payment process automation. However, whether this will be the future trend of mobile payment, or who the future of mobile payment belongs to, it is difficult to get an answer. Just as a decade ago, it was hard to imagine that mobile payments would affect our lives so deeply.

At present, the mobile payment market has not been stable, but in comparison, the momentum of WeChat payment is even stronger. In 2016, Ma Huateng publicly stated that WeChat pays online more than Alipay. Corresponding to this is Alipay's counterattack against WeChat in 2017. In the second half of 2017, Alipay strengthened its investment in marketing, strengthened the offline scan code payment layout, and acquired the Eleme, and continued to stalemate with WeChat payment in terms of payment scenarios and in-depth services.

Yes, in this mobile payment river, when Alibaba's Alipay is out of the blue, it is also the time when Tencent's rising star catches up and shakes the status of the industry leader. In addition, there are also UnionPay businesses, remittances, and other third-party payments. At the same time, there are also central bank and UnionPay's anxiety about the continued growth and development of third-party payments, and efforts to maintain the steady development of mobile payment. . Although China Merchants Bank, which was the earliest starter and was willing to invest in science and technology, failed to become a leader in online payment like Alipay, the growth of Alipay did not affect China Merchants Bank’s leadership in credit card and banking retail. Similarly, although After the WeChat payment relied on the red envelope to complete the large-scale user accumulation, the QR code was pushed to the street shop and the selling aunt that Alipay could not reach. This also did not affect the ant Jinfu to continue to expand financial management, insurance, credit and other series. In the financial market, Alipay also followed the launch of the QR code payment function. It seems that Alipay may not be able to compete with WeChat payment in the social relationship chain, but the mobile payment market may subvert the existing advantages of WeChat payment in other ways.

Duopoly payment is the status quo, but it is not necessarily the future. Although UnionPay and Apple Pay lose their first-mover advantage, they may still be able to fight with the policy and NFC technology, and the mobile payment war is still going on. Perhaps in another ten years, today's protagonists will become history, and those who stand up early are new forces.

(Translated from Caijing)