Tencent puts payment app on WeChat

Tencent Holdings Ltd is introducing a payment service to the company's popular instant messaging service WeChat. It's also the latest attempt for Tencent to commercialize the application and compete with e-commerce giant Alibaba Group Holding Ltd.

"We are convinced of the need to bring payment services to wireless platforms," said Martin Lau, president of Tencent. "Although some apps are free of charge for users, the large traffic these products bring in will enable us to sell advertisement slots, an alternative way for us to make a profit."

The Internet giant, based in Shenzhen, Guangdong province, will introduce online and offline payment services to an upcoming version of WeChat, it said.

Although Tencent did not reveal the launch date of the new WeChat, a beta version is already available for some developers.

Analysts said Tencent, famous for social and gaming products, is eyeing the e-commerce sector for profit growth as advertising growth flattens. However the new area is a territory long dominated by Alibaba, the nation's largest Internet company by market capitalization.

Alipay, a third party payment subsidiary under Alibaba, is the biggest online payment platform by transaction volume.

Pony Ma, chief executive officer of Tencent, is betting on his company's mobility strength to challenge Alibaba. WeChat's offline payment feature may add pressure to Alipay, which is also trying out off-the-Web payment services.

Transaction volumes of the third-party payment sector exceeded 10 trillion yuan ($1.6 trillion) last year in the country, said a report released by the Payment and Clearing Association of China in late June.

Online payment accounts for nearly 70 percent of the sum. The emerging mobile payment service generated a little more than 181 billion yuan in transaction volume, according to the association.