*WeChat, Tencent’s gargantuan smartphone messaging application, now offers a new feature that allows users to borrow up to 200,000 yuan (US$30,000 and AU$43,772) in seconds and without collateral.
*The loan program aims to capture market share in China’s fast-growing Internet finance sector valued at more than $1 trillion (approximately AU$14 trillion).
Byon September 18 2015 10:26 AM
*The loan program aims to capture market share in China’s fast-growing Internet finance sector valued at more than $1 trillion (approximately AU$14 trillion).
By
WeChat, Tencent’s gargantuan smartphone messaging application, now offers a new feature that allows users to borrow up to 200,000 yuan (US$30,000 and AU$43,772) in seconds and without collateral. The social media and online gaming giant said the loan service will be available later this month.
Tencent wants to create a socialising and shopping world where users can access everything they want, Fortune reports. Tencent is investing heavily on online retailers and service providers and has connections to millions of potential online customers through WeChat. WeChat has a user base exceeding 600 million people.
The new WeChat feature, dubbed “Wellidai,” is operated by WeBank, a financial institution owned 30 percent by Tencent. The loan program aims to capture market share in China’s fast-growing Internet finance sector valued at more than $1 trillion (approximately AU$14 trillion).
Through Weilidai, app users can borrow money after submitting a loan application without the need of a guarantee. The applicant’s credit-worthiness is reckoned via bank account information as well as data gleaned from a user’s social network history, The Wall Street Journal reports.
Simple payment history like taxi fares and restaurant fees can be taken into account as these services are featured in WeChat’s e-commerce functionality. The number of microtransactions and large payments are also measured.
The interest rate varies and is based on an applicant’s credit score. The daily interest rate, however, is 0.05 percent. In addition, the loans can be extended to up to 20 months.
There are also security features to forestall unauthorised use of the new loan app feature. WeBank uses facial recognition to authenticate users’ identities before it connects to traditional bank accounts and to its own online accounts.
Internet finance is the latest battleground of China’s two largest technology companies: Tencent and Alibaba Group Holding, Ltd.
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