Alipay and WeChat have made great strides in educating Chinese people switching to online payment methods, and now they are locked in competition to acquire a better market share. Alipay promised in 2017 that it would allocate RMB 1 billion in rewards to third-party services over the course of three years, in a form of handing out lucky money encourage users to scan and pay with its in-app generated QR codes. WeChat recently started testing a feature called “Friendship Discount”, enabling merchants to offer a discount to clients when paying bills as long as they are both friended to each other and the transactions are completed with WeChat Pay. Nevertheless, unlike Alipay’s lucky money is sponsored by the company, offers of “Friendship Discount” are all subsidized out of service providers’ pockets which can be canceled anytime. As to whether the approach will help achieve the expected market growth is still in doubt.
