By Li Hongmei
Chinese internet giant Tencent has succeeded in its latest campaign of combining the Chinese New Year tradition of handing out "hongbao" - red envelopes containing cash - through its WeChat messaging app, but security concerns have emerged among users, reports the Beijing-based Mirror, a paper focused on legal news.
Over 5 million users had either given or received money through WeChat's virtual red envelope feature on Chinese New Year's Eve and New Year's Day, which fell on Jan. 30 and 31 this year, according to Tencent.
While other online and mobile services also have similar features, Tencent's WeChat red envelope, which was launched on Jan. 26, went viral during this year's holiday and trumped rivals, including the country's top online payment service - Alibaba's Alipay.
Tencent's share prices also benefited from the new feature's popularity, surging 11.05% in Hong Kong before the stock exchange there closed for the Chinese New Year holiday. The company's shares suffered a 6% loss on Feb. 4, however, when the Hong Kong bourse reopened and was impacted by declining trends in the global market.
The company has also seen a growing number of users trying to quit the new WeChat feature because of security concerns. A source said that users were required to register their bank card information to send or receive money through the app, with several users later complaining of difficulties in unregistering the WeChat feature. One woman in Beijing, surnamed Chen, told the paper that she was unable to find a way to do so, even though the initial procedure of entering her bank details was so simple.
A man surnamed Tang in Chengdu in southwest China's Sichuan province said he received a message about the red envelopes, which was actually a scam. He is among a number of people who claim that the feature is being abused by fraudsters, whereby they create fishing software and send fake red packets to WeChat users to glean their bank card information.
Meanwhile, Shen Zhengyuan, a senior researcher at CI Consulting, said that Alipay dominates online and third-party payment services in China, but WeChat stands a chance in the market as the app has created a closed business environment. Tencent may see a decline in the numbers of users of WeChat's payment service, but the company has still established a sizable customer base, Shen added.
The company can also profit from the funds circulated through WeChat since the money stays in the app's account for a night before being paid to the recipient the following day.
