WeChat's "installment" is late. In the past two days, a reporter from Beijing Business Daily exclusively found that the WeChat consumer financial product "installment" has been quietly launched, and it can be repaid in 3, 6, and 12 installments in consumption scenarios such as eating and shopping, and consumption of more than 500 yuan can be used. From the small-scale grayscale test in September last year to the large-scale opening up now, in the eyes of analysts, the gradual advancement of the "installment" business is an important supplement to Tencent's fintech territory on the one hand, and on the other hand, it implies the simultaneous layout of expanding e-commerce finance.
Interest rates are broadly in line with interbank products
On June 28, many WeChat users found a new "little red dot" in the "wallet" - installment products. Click to find that the product is provided by Tenpay Small Loan, etc., supports online and offline scenarios, can be repaid in installments of 3, 6, and 12 installments, and consumption of more than 500 yuan is available, and the repayment date will be automatically repaid from change, change pass, and savings card.
Image source: WeChat
Multiple users, including reporters from Beijing Business Daily, can open a viewing quota. The reporter's experience found that the opening process of WeChat installment is no different from similar financial products in the market. Agree to the user agreement, enter the payment password, go through face authentication, and confirm the identity of the non-student, and you can get the quota approval result. Within the product interface, users can also choose to turn off staging.
Judging from the results of the personal test by the reporter of Beijing Business Daily, in terms of installment interest rate, you can choose to repay the loan in 3 installments, with an interest rate of 0.77% and an annualized interest rate of 13.75%; The interest rate of 6 installments is 0.7%, and the annualized interest rate is 14.26%; The interest rate and annualized interest rate of each of the 12 installments are 0.67% and 14.45% respectively.
Image source: WeChat
This level of interest rate is basically the same as other products in the industry. In comparison, a 500 yuan Huabei bill from a reporter from Beijing Business Daily will be repaid in 12 installments, with an annualized interest rate of 15.86%; A shopping bill of 120 yuan uses JD Baitiao 12 installments, and the annualized rate of simple interest is about 15.08%.
According to the installment "User Comprehensive Service Agreement", the service is provided by Chongqing Weiheng Technology Co., Ltd. to provide comprehensive technical services and solutions for users to obtain credit services from credit institutions. Among them, the installment credit service includes the "use installment payment at the time of consumption" model and the "use of installment turnover after consumption" model. Users can choose to use it independently.
Among them, installment payment refers to the mode in which credit granting institutions provide installment credit services based on the transactions to be paid by users in consumption scenarios. "Installment turnover after consumption" is a model in which the credit institution provides installment credit services based on the transaction that the user has completed the payment and meets certain conditions as a reference factor after the consumption is completed.
It is worth noting that "installment" is different from another product of WeChat, "split payment", which is two separate consumer credit products. "Instalments" means that the number of installments selected at the time of payment is made, and the subsequent monthly repayment is based on the number of instalments selected. If you need to repay the loan early, you need to pay it off in one lump sum. The "split payment" focuses on "1 yuan minimum payment, available at any time, and can be repaid at any time", which is suitable for use in case of emergency turnover. When you choose to pay in installments as the payment method, you will be charged interest on a daily basis after using the used amount, and you can repay any amount at any time, and there is no handling fee for early repayment.
In addition, in this installment product, WeChat has set up an automatic repayment mode that prioritizes the deduction from the change. At the same time, there are other repayment methods - generate a repayment link and send it to the WeChat dialog box, and repay the loan through WeChat Pay.
With two consumption modes and installments within 1 year, on the whole, WeChat's "installment" products have adopted a similar design to other consumer finance products on the market. The natural traffic advantage of the WeChat ecosystem has also brought more possibilities to this consumer financial product. Su Xiaorui, a senior researcher at Suxi Zhiyan, said that WeChat itself, as a super app, has a huge billion-level user flow, and users have also formed good payment habits on the WeChat payment side, but at the same time, its disadvantage is that Tencent's e-commerce scene is weak, which has an impact on the promotion of consumer financial products.
Interested in expanding e-commerce finance
As for whether the installment is fully launched, Tencent's customer service responded to a reporter from Beijing Business Daily that the installment can be used for consumption scenarios such as meals and shopping, and it does not support red envelopes, transfers, withdrawals, etc.; Scan the personal collection code to pay, the installment is not fully open for the time being, if the transaction does not support installment, you can choose other payment methods to pay.
In fact, as early as September 2023, a reporter from Beijing Business Daily learned that WeChat intends to launch a consumer credit product called "WeChat Installment". However, it is still in the stage of small-scale grayscale testing, and will continue to be optimized and adjusted according to user usage and feedback from all parties, and there is no clear launch time.
Now, WeChat's "staging" is on a large scale, according to a person close to Tencent, which is also the result of the process advancing in rhythm.
It is worth mentioning that in the 10 months since the installment function was gradually opened, Tencent's video number e-commerce team has also been slowly growing. The natural "good partner" of installment and e-commerce has also made many people in the industry speculate that Tencent's promotion of the "installment" online is intended to expand e-commerce finance.
E-commerce GMV (gross merchandise value) and installment business complement each other. According to iResearch's research data, for high-order products such as digital, home appliances, beauty, and home furnishings, interest-free installment tools have a relatively strong promotion force for their consumption. In the past, Taobao and Huabei, Jingdong Finance and Baitiao, and then there was the combination of Meituan, Douyin and monthly payment, all of which helped it become an industry giant.
"Tencent is focusing on consumer finance business at this time, and it does intend to expand e-commerce finance." Su Xiaorui said. In fact, in the past two years, Tencent has made frequent efforts to explore traffic monetization, drastically reformed the content creation mechanism and merchant entry mechanism, and introduced a public domain competition mechanism following the example of other platforms. In the face of the industry situation of platforms such as Douyin, Pinduoduo, and Xiaohongshu competing for users' attention and continuing to make efforts in e-commerce, WeChat has carried out the above actions out of consideration to resist external competition.
In the first quarter of 2024, Tencent said, "In the first quarter, the total user time spent on Channels increased by more than 80% year-on-year. WeChat has strengthened the live streaming ecosystem of Channels by expanding product categories and incentivizing more content creators to participate in live streaming." Previously, the WeChat open class also disclosed that in 2023, the GMV of Channels will increase by nearly 3 times, the number of orders for Channels will increase by more than 244%, and the number of goods supplied will increase by about 300%.
This may further increase the demand for the corresponding financial products. Can "staging" carry this burden? In the view of Wang Pengbo, chief analyst of Broadcom Consulting, it is indeed possible to combine related products with e-commerce, and for Tencent, the scene is controllable and there is almost no threshold. However, the shortcomings lie in the operation and risk control operation of product start-ups, as well as the excessive supply side caused by the fierce market competition.
Complement the fintech landscape
Payment has always been a "ballast stone" business for Tencent. According to the first quarter report of 2024, Tencent's financial technology and enterprise service business revenue was 52.3 billion yuan, a year-on-year increase of 7%; The share increased from 32% to 33%. Among them, payment still plays a major role, and "Wealth Management Connect" performs well.
However, in terms of consumer finance, compared with its peers, Tencent's pace of launching related products is not fast. Although as early as 2020, WeChat provided some users with the WeChat "split payment" function in the beta version, but it did not cause a big splash.
From the perspective of the industry, the competition in the payment market is intensifying, making up for the shortcomings in consumer finance, creating a more complete financial ecology, or becoming a "new growth point" for Tencent's financial technology.
As well-known economist Pan and Lin commented, on the whole, Tencent's fintech business has maintained a high degree of stability, and in terms of business proportion, the fintech business has exceeded one-third of Tencent's revenue, becoming an important source of Tencent's business. At present, Tencent's main business comes from advertising, games and fintech, and the installment is an important supplement to Tencent's fintech territory, which is bound to accelerate the performance growth and diversification of Tencent's fintech sector.
"After the inability to raise the payment rate in the campus scene last year, Tencent is bound to launch more in-depth and diversified products in order to seek more profit growth points in addition to games and payments." Wang Pengbo said. At the same time, payment and installment business are inseparable from WeChat's traffic, payment and credit classification products, which can help WeChat grasp more consumer and merchant data, and then extend credit and loans faster and more conveniently, which will form synergies between businesses.
At present, WeChat's "staging" has not yet been fully opened, and its reputation and effect are still to be tested by the market. However, it has to be mentioned that once the "loan" is touched, institutions must withstand greater consumer protection pressure and adhere to more compliance tests. Su Xiaorui said that the supervision has become stricter, and the previous criticism of Tencent is the slow response speed of customer service. For Tencent's installment and other financial businesses, she suggested that the main management responsibility of the platform should be implemented in the financial marketing process, and the attributes of the installment products and the various rates generated should be truthfully disclosed to financial consumers, and at the same time, financial consumers should be smoothed to communicate and continuously improve the construction of financial consumer protection.
Pan and Lin also proposed that WeChat's "installment" should distinguish between self-operated and loan-aided loans, clarify the underlying assets, clarify the source and destination of the credit line, and clearly inform users.
Beijing Business Daily reporter Liu Sihong Dong Hanxuan