One of the biggest hurdles for foreign companies, which are keen to be a part of the Chinese e-commerce market, is the absence of uniform payment solutions. That looks set to change now as companies like Tencent are now coming up with solutions that offer safety and ease in transactions.

Tencent Holdings Ltd, China's largest listed Internet company by market value, has enabled online transactions for select merchants by linking payment services to its popular WeChat smartphone application, which has more than 300 million users globally. The application lets users send voice messages, photos and other media the way they might send text messages, without charging any extra fees. Since early June, WeChat has empowered a select few of its registered corporate accounts with online shopping facilities. WeChat does all back-end technical integration and support for these vendors, including page design and payment linkups.

Online transactions are made available through credit cards, online banking or TenPay, the company's third-party payment platform, says Liu Sishan, public relations officer of Tencent. TenPay, like its domestic rival Alibaba Group Holding Ltd's AliPay and eBay Inc's PayPal in the US, allows merchants to process payments from customers' personal accounts.

The application has already attracted foreign retailers such as fast-food chain McDonald's Corp. The retailer has opened an online channel on WeChat and offers several discounts to customers who complete transactions using the WeChat framework. According to Pony Ma, Tencent also plans to introduce mobile social games on WeChat and other micro-payment facilities for services like taxis.

Yi Fanghan, an independent industry expert and blogger, feels that the mobile phone payment service on WeChat is a key step in Tencent's ambition to develop e-commerce solutions.

"It provides momentum for the changes taking place within the whole industry as future payments will take place on mobile devices," he says.

Dong Xu, an analyst at IT consultancy Analysys International, says such alliances will create more possibilities for cooperation "wherein merchants can hunt for business opportunities themselves". While a majority of the Internet companies are not averse to such solutions to attract more players, prior attempts have largely proved to be lukewarm, he says.

Sina Corp, which owns the popular micro-blogging service Weibo, has recently launched an online payment service in a bid to transform its heavy Web traffic into revenue amid increasing competition.

Dubbed WeiboPay, the online service will team up with merchants that sell goods via their corporate accounts on Weibo, says Hong Lizhou, the general manager responsible for Sina Weibo's marketing strategy.

"But Weibo has faced a setback as the micro-blog service adopts rampant intrusive advertisements and thus wears out users' patience. This is the one pitfall that WeChat should avoid", Dong from Analysys says.

hewei@chinadaily.com.cn

(China Daily European Weekly 08/16/2013 page7)