WeChat, the number one messaging app in China, is expanding its geographical reach. The Tencent owned service, which also includes payment and ecommerce capabilities, will now be available in Malaysia. That’s WeChat’s first new market outside of China and Hong Kong. Malaysia granted the requisite payments license last November.
As of now, WeChat users in Malaysia can use the service to transfer money between individuals and also make payments to offline merchants in the local currency. There is some suggestion in reports that the delay in launch, and because of stringent Chinese regulation, means that the WeChat Malaysia launch is the result of a new service built specifically for the local market and not a service to make payments easier for Chinese visitors to Malaysia.
Malaysia is a vibrant market. Technology-savvy Malaysians are embracing a digital lifestyle, and to meet this shift, the payment experience has to evolve. Bringing WeChat Pay to Malaysia is our response to this.
– S.Y. Lau, senior vice president at Tencent
WeChat Malaysia has launched to great local fanfare and a one week promotional period that started on 21st August. Users can bag a cash prize of up to $20 if they use or recommend the service in this inaugural week. It’s being billed as an online equivalent of the Chinese New Year ritual of giving friends cash-filled red envelopes called hongbao. It’s a well-worn tactic: WeChat Pay’s introduction of an “e-hongbao” feature in 2014 was hugely successful in China.
There are still a number of obstacles to overcome. In the first instance, cash remains the preferred means of payment in Malaysia, even if smartphones are widely and well used by the population of 32 million. And to be truly effective, there is a need to do local deals with Malaysian banks and no tangible news about that has been released at this time.
The Malaysian expansion of WeChat is a clear signal that the messaging and money app has every intention of expansion into other markets. But where next?
