WeChat takes on Ant Financial with new, integrated credit scoring system

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Tencent has started testing a credit scoring feature for WeChat Pay in numerous cities around China, basing a user’s rating on spending behavior and personal connections, among others.

The system, dubbed WeChat Pay Points, our translation, has been rolled out in Beijing, Shanghai, Guangzhou, and Shenzhen, The Paper reports (in Chinese). The company teased the new feature at its WeChat Open Class PRO event in the southern Chinese city of Guangzhou earlier this week.

The social aspect of the app will be included when scoring users. When questioned by TechNode, a WeChat representative would not elaborate on how connections and friends on WeChat affect a user’s credit score.

The system is reminiscent of Alibaba-affiliate Ant Financial’s Sesame Credit, which rates users on a scale of 350 to 950. The e-commerce giant’s platform users metrics including purchase history, assets, and fulfillment of contractual obligations to calculate a user’s score.

WeChat’s new system bases scores on social data collected through its mobile payment service. The company said it could not reveal its scoring range, through Tencent Credit assigns ratings of between 300 and 850. WeChat is reportedly targeting nationwide rollout by the end of the year.

“The credit score is calculated based on WeChat Pay’s pool of data, particularly on personal consumption behavior and the ability to keep obligations,” the company told TechNode. WeChat said the purpose is to “provide services that make people’s lives simpler and more convenient.”

Screenshots showing WeChat’s interface, along with the credit scoring feature (Image Credit: WeChat account Guofen Zhushou)

Users with high scores will be rewarded with perks such as waiving of deposits for rental services and hotels, and paying for services and goods after delivery.

Power bank service Xiaodian is now supporting the feature. Users with high scores can apply to rent the portable chargers deposit-free. The company said it is working with a number of brands to test the new feature.

For businesses, the credit score system has a number of features, including user risk assessment and payment collections, which aim to help companies lower their percentage of patrons with bad credit.

Tencent began testing its own credit rating system in mid-2017 and officially launched the feature last year. It is one of eight companies that were approved by the People’s Bank of China to develop its own private credit score platforms in 2015. Alibaba is another company that was given the green light, launching Ant Financial-run Sesame Credit shortly after.