Tencent’s new credit system to use payments, social data

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Update (2/1/2018 11:58): Tencent has taken down Tencent Credit.

Update (2/1/2018 14:15): According to a company spokesperson, the launch of Tencent Credit was only a trial, and that the trial has ended.

As China continues to race towards a cashless society with mobile payments, its tech giants are playing an important role in shaping the future of consumer credit – especially in a country where only about a third of the population has a credit history.

Yesterday, Tencent launched its own credit system, Tencent Credit, to all Chinese nationals who use WeChat or QQ. Both chat apps are operated by Tencent, and each has more than 800 million monthly active users.

Depending on users’ scores, which can range between 300 and 850, they can access a number of different services and perks, including waiving deposits for housing rentals in Shenzhen, using WeChat to ride the metro, and renting Mobike bikes free for a month. Some of these offers, however, are limited to certain cities.

If your friends have high morality, then your credit should be good, too.

In the future, users will also be able to borrow up to US$47,600 in loans via Tencent Credit, using the company’s microloan service Weilidai. The loans are backed by WeBank, Tencent’s “internet bank” – there are no physical branches.

Similar to Sesame Credit, Ant Financial’s proprietary credit score, Tencent Credit scores users according to five broad metrics: honor, security, wealth, consumption, and social (Editor’s note: This is Tech in Asia’s translation, not Tencent’s). According to Tencent, these categories include mobile payment transaction data from WeChat Pay and QQ Wallet, information about financial assets and repaid loans, as well as data on the quality of the user’s social network.

Third-party data sources, such as telecom operators, financial institutions, and government departments, will also contribute to a user’s credit score, according to the service’s terms and conditions.

Tencent declined to elaborate on their scoring system.

Credit race

Tencent is one of eight companies that the People’s Bank of China (PBOC) approved for credit score piloting in 2015. Ant Financial’s Sesame Credit, which launched that year, was one of the earliest systems to go online.

Unlike the country’s traditional financial institutions, tech companies have reams of consumer data, including online purchase habits, social media, and travel data. By using big data to calculate credit scores – instead of data points like car loans and housing mortgages – and automate loan approval, fintech firms have been able to offer small-ticket loans to more consumers.

See: How fintech startups are using big data to solve China’s credit gap