Alibaba’s Ant Financial has been leading the charge in online financial transactions, but Tencent wants to gain back market share by setting up its own credit sharing system. A much needed move, says fintech expert Matthew Brennan to Pymnts.
The main concern is that Tencent may have ceded too large a lead in the race to Ant Financial, whose Sesame Credit has had 2.5 years to gain ground in the marketplace, particularly since Alibaba is the bigger player — with 53.7 percent of China’s mobile payments market to Tencent’s 39.5 percent.
But Tencent, whose payments services have until now been largely limited to small transactions in convenience stores and peer-to-peer lending, has spent much of the last 12 months upping the level of its game and has signed up many new retailers to its payments platform, including Starbucks.
Matthew Brennan, co-founder of tech consultancy China Channel, says the credit scoring play is the next natural move if Tencent wants to continue to bring the competition to Ant Financial and its leadership position.
“Tencent obviously wants to change that, and they need to build up infrastructure to compete with Alipay’s more mature offering,” he said. “Credit scoring is an essential part of that.”
Are you looking for more fintech experts at the China Speakers Bureau? Do check out this list.