Linked by Thom Holwerda on Thu 1st Feb 2018 19:29 UTC
Internet & Networking

China's most popular messaging app, WeChat, has always had a close relationship with the Chinese government. The app has been subsidized by the government since its creation in 2011, and it's an accepted reality that officials censor and monitor users. Now, WeChat is poised to take on an even greater role: an initiative is underway to integrate WeChat with China's electronic ID system.

WeChat is a remarkably clever move by the Chinese government. Everybody over there is already using it, and by basically co-opting it, they get a free statewide monitoring and control platform. Ban a few western alternatives here and there, and you're done. Western nations are toying with similar ideas - see e.g. Germany's new laws - and it doesn't take a genius to see the dangers here. While you may 'trust' your current government to not abuse such wide-ranging laws and technical capabilities, you might not be so eager with the next one. If Americans can vote for a Trump, Europeans can, too.

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Comment by nrlz
by nrlz on Fri 2nd Feb 2018 10:15 UTC
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Let's break down WeChat's features and analyze them one by one:

1-1 Messaging:
Nothing groundbreaking or profitable here. They do have a lot of features like sending voice messages, stickers, sending photos, sending money, etc.

Group Messaging:
Nothing groundbreaking or profitable here. The government probably monitors these for potential conspirators or trouble makers.

Video Conferencing (1-1 and group):
Probably nothing groundbreaking or profitable here.

Blog (like Facebook):
WeChat inserts ads in between friends' posts for revenue. The government probably also monitors these for the same reason as group messaging. But a users posts are not 100% public. You must be friends with someone to see their posts. Unless if you deliberately look up their profile where you can see their last 10 posts if they choose to make them public. This makes using blog posts to spread propaganda difficult since your audience must add you as a friend first to see your posts.

Mini apps (like ride-sharing or buying movie tickets):
WeChat has direct links to mini-apps but these mini-apps are really just third-party webpages loaded through the WeChat app that hook into WeChat's authentication and payment system. It saves users from having to deal with usernames and credit card stuff. I don't know if WeChat takes a cut from those services but regardless they still make a profit by getting users to use WeChat Pay.

Single Sign-In (like "Login with Facebook"):
Single sign-in is mostly used by other phone apps which direct you to WeChat and then direct you back to the third party app with your user token. Nothing groundbreaking or profitable here. WeChat requires your phone number on first launch and they verify it with an SMS message, which deters most fake accounts. All China phone numbers require verification of your national IDs before they can be activated. So that further deters fake accounts but it does allow a user to create multiple accounts as users can have multiple phone numbers.

WeChat Pay:
This is probably their cash cow and has the benefit of the network effect (the more users that use it, the better the system and the more users they can attract). But as a payment platform they charge very little fees compared with other players like PayPal or Visa. Not to mention they side stepped Apple/Android's 30% cut off all transactions.

1. Moving money from your bank account to WeChat is free.
2. Transferring money to other users is free.
3. Moving money back to your bank account charges 0.1%.
If you run a business and you accept money through WeChat using the user-to-user method and you pay your suppliers also using WeChat, then you've incurred no charges. e.g., if you buy a cake for $10 and sell it for $15 and use WeChat for both transactions, there are no charges. But if you want to transfer the $5 profit to your bank account, you pay $0.005 in fees to WeChat.
4. But transferring money in user-to-user mode is cumbersome as it must be performed phone-to-phone. WeChat supports external barcode scanners used in supermarkets/restaurants which charges a transaction fee ranging from 0.1% to 1% depending on the business type with the median being 0.6%. (Source: )

The government would probably have a blast correlating users with their purchases. Plus they know your cellphone number through WeChat so they can triangulate your real-time location.

Edited 2018-02-02 10:34 UTC

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