The United States announced partial bans on WeChat on Friday.
Washington:
Washington’s crackdown on WeChat will disrupt communications between millions of people in the United States and their friends, families and business partners in China.
But the app had failed to replicate its success in China as the dominant smartphone payment platform in the United States.
The U.S. Department of Commerce on Friday announced partial bans on WeChat as well as the TikTok video app.
The command will slow down WeChat to make it unusable in the United States for video chats with family and friends.
“They slow down the speed to make it technically nearly impossible to use audio, video or send images,” said Wu Ziyi, a Chinese political science student at the Massachusetts Institute of Technology.
– Universal application –
In China, WeChat has led the country to cashless trading in just a few short years, and it is used by hundreds of millions of people for daily payments.
It’s sort of a universal app, a digital bank account and ID card, to order food or a car, send gifts, handle medical issues, and interface government services.
Owned by tech giant TenCent, WeChat in the United States has around 19 million active daily users, said Adam Blacker of Apptopia, a mobile apps consultant.
“It is mainly used by Chinese who visit or work here or by Chinese-Americans who keep in touch with loved ones,” said William Reinsch of the Center for Strategic and International Studies in Washington.
This includes several hundred thousand Chinese students in the United States, who use it for “at least 90%” of their daily online conversations, according to Wu.
He said it could be used to exchange small amounts of money.
But it can’t be connected to US bank account or credit or debit card, and because it only works in Chinese yuan.
US companies also use WeChat for communications with Chinese vendors and may potentially use it for payments, although other services – like TenCent’s rival Alibaba’s Alipay feature – are better designed to handle large sums and payments. currencies.
If American businesses are using its payment feature, Reinsch said, “I haven’t heard anyone complain that they could be stopped from doing it.”
Now, under the order of the Commerce Department, WeChat cannot be used to transfer money to the United States.
Reinsch said U.S. companies are primarily concerned that the long-standing crackdown will apply to the use of WeChat outside of the United States, hampering their business in China.
This use still seems authorized.
– Tough competition in the United States –
WeChat has attempted to enter the U.S. payments market before, but has made little inroads due to resistance from banks and merchants, regulations that favor credit and debit cards over digital wallets, and competition. fierce.
In 2018, the company said its WeChat Pay app was about to take off, especially in branded stores where Chinese tourists abound, hoping to leverage it for wider expansion.
Gaming and tourism conglomerate Caesars Entertainment has started accepting WeChat payments at restaurants, shops and entertainment venues in Las Vegas, in an effort to help Chinese tourists spend their money.
But with US-based rivals like Zelle, Venmo, and Apple Pay vying for the market, WeChat barely registered and Caesars appears to have given up.
The company did not respond to a request on WeChat.
Wu said Chinese in the United States could still find ways to use the app, through VPN networks or other means, but most are already turning to other chat apps to communicate with people. families at home.
“My family is very traditional, so we’ll probably go back to the phone call,” he sighed.
