WeChat Pay by Tencent and Alipay, a subsidiary of Alibaba, have long dominated digital payments in China, but have always faced new challengers. The latest online payment participant is Douyin, the Chinese version of TikTok.
The short video app recently added "Douyin Pay" to its list of existing payment options, which include Alipay and WeChat Pay.
"The approach of Douyin Pay (Douyin Zhifu) is to integrate existing major payment options and ultimately improve the user experience on Douyin," a spokesperson for Douyin said.
Payment is a natural step for Douyin, who has a growing e-commerce business. Users can be directed to a product link while watching a video from an influencer reviewing, for example, a lipstick. Instead of the ubiquitous WeChat Pay and Alipay, they may one day opt for Douyin Pay, if the incentives are big enough.
Other internet giants, such as e-commerce giant JD.com and food delivery service Meituan, have also tried to lure people to use their own payment methods, although the market duopoly is hard to break. All in all, Alipay and WeChat Pay handle around 90% of China's electronic payments.
Like other Internet companies, Douyin's parent company, ByteDance, acquired a coveted payments license by acquiring a third-party payment company. Last September, a company controlled by ByteDance founder Zhang Yiming bought a payment solution provider called Wuhan Hezhong Yibao Technology Co. The license, in turn, allows Douyin, Toutiao and other ByteDance services to offer payment functionality.
Users can, for example, receive an electronic red packet full of cash from a Douyin campaign and deposit it into their bank accounts.
The launch of Douyin Pay seems at the right time with the upcoming Chinese New Year holiday, a time when families and friends are giving each other red packages. Over the past decade, WeChat has popularized electronic versions of these auspicious money-filled envelopes, which helped WeChat Pay take off in the early days.
According to Chinese business news provider LatePost, Douyin has signed an agreement with Chinese state broadcaster CCTV to be its red envelope technology provider for the Spring Festival Gala, traditionally a major advertising event of the year, according to the provider. Chinese economic news LatePost. Alibaba's young rival, Pinduoduo, had a similar deal last year in an effort to grow their payment users.