Monday, January 9, 2017

Red Packets

Link

[Red Packets is] a feature WeChat introduced in 2014 to exchange money electronically, based on the age-old Chinese custom of giving red envelopes filled with money at weddings, holidays, and special occasions. Mike said whenever people weren’t checking their messages enough, the producer would send a red envelope to the group, and everyone would go crazy. To me it sounded bizarre, the equivalent of your boss tossing a fistful of change at your cubicle. The producer would also send red envelopes as a reward to the cast and crew for their hard work.[..]

Say you have a chat group with five pals. You can put $5 in a red envelope and set it to disburse equally, so each friend gets $1. Alternatively, you could stipulate that the first two people to tap will get all the money in equal portions—$2.50 each—or that the first two people get a random cut, maybe $1 for one person and $4 for the other. The result is that any time a red envelope appears, people scramble to tap on it as fast as possible. (The packets expire in a day, adding to the time pressure.) Only afterwards do they see how much money they’ve won, giving it an addictive element of surprise. So addictive, in fact, that third-party apps now exist that let users grab red envelopes without unlocking their phones [..]

WeChat introduced mobile pay in 2013, a year before its Red Packets, but it’s the latter—with its seductive blend of social networking, gaming, and gambling—that got users on board with the concept of sending money electronically. Today, out of WeChat’s 700-plus million active users, nearly 300 million have added their bank information to WeChat Pay, enabling them to withdraw from and add money to their virtual wallets. That’s contributed to the most bustling mobile payments economy in the world: In 2015, China’s mobile transactions surged to $235 billion, surpassing the U.S. for the first time. According to iResearch, China’s mobile payments market is estimated to be worth 15.7 trillion yuan in 2016—28 times the $62.5 billion forecast by eMarketer for the U.S. in 2017—and 28.5 trillion yuan in 2018.