(Yicai Global) Nov. 19 -- Lingqiantong, a flexible money-market mutual fund from Tencent Holdings, opened to public beta testing on Nov. 16. The 'wallet' function in Its messaging and third-party WeChat app may be used to pay with WeChat, and users can earn income at the same time, just as with Alipay's Yu'e Bao function.
Lingqiantong is a basic service for WeChat payment like the 'balance' in WeChat wallet, state media National Business Daily reported.
The Alipay Yu'e Bao of Tencent rival Hangzhou-headquartered Alibaba Group Holding e-payment arm Ant Financial Services realized simultaneous consumption and wealth increase a few years ago.
WeChat users may now also transfer money from their WeChat balance or debit card into Linqiantong after signing up, and vice versa.
The function may also be used in direct payments in various consumption scenarios after it is set as the default payment method in WeChat and to repay credit cards.
With an investment threshold as low as CNY0.01 (USD0.001 cent), Linqiantong also supports WeChat users in automatically earning income, and users may subscribe to and redeem their share of the fund at any time. The function is collaborating with various money-market mutual funds like Hong Kong's E Fund Management, China Universal Asset Management and Harvest Fund, and Shenzhen-based China Southern Asset Management.
The WeChat wallet mutual fund annualized seven-day yield was between 3.037 percent to 3.29 percent on Nov. 17.
More than 10 products from various asset management firms are available for Alipay users, with annualized seven-day yields, some over 3.28 percent, others less than 2.5 percent.
As one of the two leaders in mobile payment, for Shenzhen-based Tencent to also connect money-market funds and consumption scenarios in WeChat is thus but natural. Testing of Linqiantong also marks a re-intensification of the battle in the whole scenario consumption arena between WeChat and Alipay.
Private transfers of electronic red envelopes have become the most important source of spending funds for 62.4 percent of Chinese, Tencent Wealth and Tencent Fintech Thinktank reported just one week before Linqiantong's debut.
With CNY1.5 trillion in total composed of small amounts, loose change money management is a huge market, the report also notes. Yu'e Bao means 'balance treasure,' while Lingqiantong means 'small-change fast-pass.'
Yue' Bao overtook JPMorgan Chase's US government market fund of USD150 billion to become the biggest money market fund in the world at USD165 billion, New York-based online media SupChina reported in April.
Editor: Ben Armour