JD Pay challenges WeChat

Author | Liu Baodan

Editor | Zhou Zhiyu

For a long time, China's third-party payment industry has been dominated by Alipay and WeChat Pay, with JD Pay only occupying a small share. Now, JD Pay plans to catch up.

On December 19th, at the 2024 JD Supply Chain Financial Technology Service Trade Industry Conference, a relevant person in charge of JD Technology's payment business announced that JD Pay aims to achieve a service fee at least 20% lower than that of WeChat Pay by 2025. The usually low-profile JD Pay rarely makes public statements, which also indicates that the payment market may welcome a new change.

This statement from JD Pay mainly targets the industrial side. The aforementioned person in charge stated that through this strategy, they believe it can bring better cost reduction effects for enterprises.

This is part of JD's supply chain financial strategy. At the conference, JD Technology showcased the effects of four "integrated" service strategies in industries such as health and large-scale travel: through deep integration of professional financing services in the industrial chain, JD Technology successfully helped enterprises save over 1 billion yuan in costs in 2024.

The four "integrated" aspects mainly refer to upstream + downstream, internal + external, technology + finance, B-end + C-end, with the core being to provide full-link supply chain financial services from raw material procurement, goods circulation to terminal consumption for the real economy. Payment is an important part of this, while other areas such as consumer finance and wealth management are also significant components of supply chain finance.

JD Pay obtained its "third-party payment license" in 2012 and began providing services for JD's internal operations and industrial chain companies. Currently, JD Pay's product matrix includes card payments, white bar payments, facial recognition payments, and more. After more than a decade of development, China's third-party payment market has formed a market structure dominated by Alipay and WeChat, with JD, Douyin, Meituan, and others as supplementary players.

According to the iResearch report "2024 China Third-Party Payment Industry Research Report," in 2024, China's third-party comprehensive payment transaction scale is expected to reach 580.7 trillion yuan, a year-on-year increase of 6.6%. The payment market is gradually transitioning from a rapid growth phase of incremental competition to a stock competition phase under pressure for scale growth.

Against this backdrop, if JD Pay wants to gain more market share, it must continuously enhance its competitiveness. In fact, JD and WeChat Pay have always had a close relationship; in 2014, Tencent invested in JD, and their in-depth cooperation in payment has continued to this day.

This time, JD Pay chose to benchmark WeChat Pay on service fees, not on the user side, but on the enterprise side, which is also the differentiated path JD Pay wants to take.

The characteristic of JD Pay is its roots in the JD industrial chain, providing various payment solutions online + offline, C-end + B-end, domestic + international, and achieving efficiency through technological means. JD Pay can complete transactions in 3 seconds, and JD can also provide enterprises with better cost reduction and efficiency enhancement services. Solving problems from the industrial perspective is a commonality across many of JD's businesses.

A relevant person in charge of JD Pay stated, "In terms of payment, there is definitely a gap compared to competitors; perhaps user habits are not as good, but precisely because of this, we have put more effort into the supply chain. Now, on JD Mall, for transactions over 50,000 yuan, JD's payment success rate exceeds 80%, while other platforms' payment success rates are only 18% In the past year, JD Pay has achieved good results with the support of the entire industry and JD's own development. The aforementioned person in charge revealed that currently, JD Pay has a user base of 580 million, covering more than two-thirds of the entire mobile payment users. More importantly, JD Pay has served over 4 million merchants.

According to insiders from JD, "JD predicts that the transaction volume for this year will exceed 12 trillion yuan, which is achieved through JD Pay for upstream and downstream transactions."

To boost market share and quickly narrow the gap with payment giants, JD has also shown determination. At the meeting, JD announced that it would invest at least 1 billion yuan in marketing expenses to conduct marketing activities at corporate cash registers, driving the share of JD Pay.

In addition to corporate payments, JD Pay is also continuously advancing in personal services and cross-border services, especially in cross-border services.

After two years of development, JD has launched a cash register for corporate exports, making it more convenient for foreigners to make payments. At the same time, JD Pay also provides currency exchange, customs duty solutions, and global payment capabilities, helping enterprises achieve global collection and payment functions.

Since the beginning of this year, internet giants have been breaking down walls, but this does not mean that companies are shaking hands in peace; rather, it is moving towards an era of coexistence of competition and cooperation. For JD Pay, relying on the supply chain to carve out a new path and achieve a turnaround will be quite a challenge. However, for merchants and consumers, it may not be bad news.

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