NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Monday, February 8, 2016

As technology hubs from Silicon Valley to Bangalore work hard at devising digital approaches to finance that could alter the global banking landscape, mobile banking penetration in China has already exceeded390 million people. And for Chinese-owned Tencent Holdings, the world’s fifth largest Internet company, China’s 1.3 billion-strong market is just the beginning. The tech giant’s best-known social network, WeChat, is fast gaining traction in Africa, and mobile banking is one area in which its influence is spreading.

Outside China, WeChat is largely misunderstood. Referred to as “Twitter on steroids” as often as WhatsApp’s “rival messaging service,” the mobile app has arguably outgrown even its Chinese name, Weixin, which translates as “tiny message.” Five-year-old WeChat is far more than a social network or messaging service. The mobile app can perhaps be more accurately described as a gamified WhatsApp-Facebook hybrid, with all the social applications of both, along with a Tinder-like dating feature, voice and video calls and a multi-functional digital wallet, all rolled into one.

The African market is a logical next step in WeChat’s growth trajectory. The majority of Africans will first gain access to the Internet through mobile devices, and acquiring market share during the relatively early stages of Internet adoption on the continent is key.