China's Tencent (0700) WeChat Messaging Application Now Allows Users To Digitally Exchange Cash Gifts

The Chinese have traditionally gifted “red envelopes” containing money during the upcoming Chinese New Year, but now with the advent of smartphones, they are doing so digitally with popular messaging application WeChat’s mobile payment function.

WeChat users have two options when giving out red envelopes this year – the first works in a similar fashion, and allows a user to send a direct transfer to a specific person. Another more interesting option is to send money to a group of friends, and allow the cash to be randomly divided between them, Tech in Asia reported on Tuesday.

The function is called “Xinnian Hongbao”, which means New Year red envelopes in Chinese. The new gifting function will continue beyond the holiday season, and with many users signing up to take advantage of the fun and easy mobile payment system, Tencent Holdings Ltd (HKG:0700), the parent company of WeChat, can look forward to a quick surge of new users.

The seasonal promotion takes advantage of the Chinese New Year celebration, which kicks off on Thursday, and will last seven days. The holiday season is when the Chinese return to their hometowns and celebrate with their families, but also when they spend lots of yuan on holiday shopping.

Launched on Saturday, the promotion from WeChat, which allows users to link their mobile messaging accounts to their bank accounts, has quickly gone viral. The minimum gift is just one yuan, and there is no processing fee. It is a fun and easy way for mobile users to bond for relatively little money, according to Tech in Asia.