The battle between Tencent and Alibaba is entering a new field—credit scoring, a key infrastructure that is certain to escalate the mobile payment war between the two internet giants.
Tencent opened this week its new credit rating system to limited group users on QQ, WeChat’s older sibling. This marks a big step forward for Tencent: Not only does this fill in a glaring gap in their product lineup, it also puts them in direct competition with Alibaba’s Sesame Credit, the dominant mobile credit score.
TechNode has reached out to Tencent to see if and when this service will come to WeChat. When we get a response we will update.
According to leaked screenshots from early testers, the credit scores—ranging from a maximum of 850 points and a minimum of 300 points—were calculated from five indexes: social connections, security, wealth, the ability to honor an agreement, and consumption behavior.
Unsurprisingly, social data constitutes a major part of Tencent Credit’s rating system. The massive data collected from WeChat and QQ—which claim 900 million and 860 million monthly active users respectively—or even the blockbuster game Honour of Kings would contribute to the data pool. The consumption data was mainly gathered through Mobile QQ and WeChat payment. Given the tie-up between Tencent and JD, it’s highly possible that consumption data from JD would be integrated as well.
Tencent is also partnering with financial institutions like WeBank, China Construction Bank and local service institutions for complementing the credit rating mechanism.
On the other hand, Alibaba’s Sesame Credit rates users credit with scores of between 350 and 950 based on their credit history, behavior preferences (shopping, payment, and P2P transaction histories), ability to honor an agreement, identity features (education, career, and other behavior tied to real-name identity), and social connections. In addition to the first mover advantage, Sesame Credit’s biggest advantage is in the commercial purchase data and user behavior insights Alibaba has been collecting over the years through Taobao, Alipay, and Tmall.
For most users, how credit scores will actually affect daily life is of the most concern. Compared with Sesame Credit which has been integrated into various services of traveling, healthcare, and bike/car rental, the application scenarios of Tencent Credit is rather limited. But one feature did catch our eye: users with high Tencent Credit might be able to ride Mobikes deposit-free, similar to the partnership between ofo and Alipay’s Sesame Credit.
As the backers of China’s two largest third-party mobile payment services Alipay and WeChat Payment, both Alibaba and Tencent have set early sights on the credit scoring sector, an essential component for financial services to solve the rising online security issues by leveraging big data.
In 2014, when Alibaba’s Ant Financial was tinkering on Sesame Credit, Tencent also laid out in the sector with plans to launch a similar product. Both the companies obtained government approval to run their consumer credit rating services two years ago. Compared with the swift development of its competitor, Tencent Credit has made little progress since then, reportedly due to Pony Ma’s insistence on “protecting users’ personal data” (in Chinese).
However, building an in-house credit rating system is of increasing strategic importance as the ecosystem surrounding WeChat matures and the whole country is moving irreversibly towards a cashless society. Furthermore, news of Tencent Credit’s public testing brake out this Monday, amid another round of promotion frenzy between the two internet giants for more territory in China’ mobile payment market.