While the rest of us struggle to come to a compromise on which platform to pay our friends back—Venmo, PayPal, Square Cash, or
Lai is the general manager of Tenpay, the mobile payment service by China’s Tencent Holdings. He helped launch a highly successful experiment that socialized, digitized and gamified the tradition of giving red envelopes in celebration of Chinese New Year.
Over Tencent's WeChat messaging platform in China, friends didn’t just give each other red envelopes, they had the power to make it a competitive game. Within a group of 20 people, for example, a “hongbao” or red envelope giver could set it up so that only the first ten people to “grab” an envelope would get any money. There was also a random amount function that randomized a set amount of money to be unevenly distributed among a group of people. The feature was so popular that the company plans to make it internationally available next year so anyone can join in on the fun.
“We designed it so that the max amount people can get in one red packet is ¥200 RMB [about $32 USD],” said Lai. “It’s meant for small dollar cash gifts to your friends and relatives.”
Whereas gambling in China is officially illegal, the government is allowing soccer lovers to make bets on teams playing in the World Cup through Tenpay on WeChat.
Zhiming Lai, who also goes by Jim Lai, is General Manager of Tencent Holdings' payment service,... [+]
With the help of its large, active user base of 650 million, Tenpay is one example of how Chinese companies are leading in mobile payment services. Tencent just bought a 19.9% stake in online classifieds ads site 58.com to compete with Alibaba for customers. Alipay (owned by Alibaba), Unionpay (owned by the government) and Tenpay currently dominate China’s mobile online payment sector with over 80% of the total market share, according to China Internet Watch.
Aside from reaching nearly 800 million active users on its instant messaging software QQ, Tencent also has investments in Chinese taxi-hailing app Didi Dache and Kabbage, Inc., which provides financing to small businesses that otherwise would have trouble getting loans.
Lai has been using his background in tech and finance to help small individuals and enterprises get easy access to build credit, an area in which he says China is behind and needs further education. When Lai was an undergraduate at MIT, he found it difficult to get a credit card himself because he didn’t have any credit scores as a foreign student. But a classmate advised him that even if he could pay for a secondhand car in full, he should get at least a small loan to repay in order to build up his credit history.
China remains a cash-based economy where less than 10% of the population have records in the country's credit bureau, while 70% of Americans hold credit cards and credit history.
“We think that credit means fortune or wealth in this world,” said Lai. "It means you can fund your future credit card, mortgages, or have funds when someone's in the hospital."
Aside from small businesses, Tenpay’s open platform approach is also helping banks serve its customers directly via WeChat.
“We don’t take any cuts,” said Lai. “That’s a very strong way of showing that we take our open platform approach in a serious way so our partners and the whole ecosystem can benefit from it. We’re trying to do what banks are not doing efficiently.”
Before Tenpay came along, Chinese banks had to spend resources developing their own app and then encouraging customers to download it. Now banks can use its platform to serve their customers directly while saving money by communicating through WeChat messages instead of
On Tenpay’s platform, users can pay for hailed taxis and make in-app purchases on WeChat for orders ranging from local pharmaceutical chains to organic tea shops. Meanwhile, Americans like Forbes writer Steven Bertoni have found very few options in mobile payments to choose from, as demonstrated in Bertoni's recent experiment to see how far he could get around with just his iPhone in New York.
China may be way ahead of the U.S. in mobile payment, said Lai, but there have been times where the government has pulled its tech giants back. In March, the government started blocking Alibaba and Tencent from processing payment through virtual credit cards. Tencent said it has been fighting back by researching and gathering previous cases from other countries, including the U.S., to give the government some reassurance.
“One such case we used was the
“My big takeaway from the Bay Area is that this hub will continue to be the innovative engine, keep on having new ideas and the Chinese market has the scale,” said Lai. “So it will be mutually beneficial for the U.S. and Chinese companies to have more talks and exchange ideas.”
Lai said Tenpay's open platform is key to its growth. Tencent expects to have about 100 million mobile payment users by the end of the year.
