Beijing asks WeChat to lower its mobile payment share amid digital yuan pilot

Beijing has reportedly requested Tencent Holdings, the parent company of WeChat, to decrease the market share of its mobile payment service. This move comes shortly after the launch of a digital yuan pilot program in Hong Kong. The request from Chinese regulators primarily targets the market share of in-person payments made through QR codes. Although the specific targets for WeChat Pay’s market share reduction have not been disclosed, sources close to the company state that WeChat is being cautious about the potential risks of becoming too dominant. Currently, the mobile payment market in China is dominated by WeChat Pay and Ant Group’s Alipay. The request to reduce WeChat Pay’s market share coincides with Beijing’s efforts to promote the adoption of the state-backed digital yuan. Despite its launch in 2020, the digital yuan has faced challenges in gaining significant traction, with concerns over the absence of interest and limited usability. The recent directive to Tencent may be part of a broader effort to ensure that private tech giants do not overshadow the digital yuan, allowing it to integrate into the daily financial lives of Chinese citizens.