(Bloomberg) -- While much of the digital world experienced a surge in usage during the coronavirus outbreak in China, one sector took an unexpected hit: Online payments.
Tencent Holdings Ltd. executives on Wednesday said transaction volumes on WeChat Pay dipped as usual during the Lunar New Year holiday, when people tend to congregate in homes and commercial activity slows to a crawl -- only to rebound quickly when work resumes. This year, the rebound came later, James Mitchell, chief strategy officer at Tencent, said during an earnings conference call.
That's because shopping malls, stores and restaurants -- the brick-and-mortar merchants that account for the bulk of payments through Tencent's ubiquitous WeChat app -- shuttered across the nation in an attempt to contain Covid-19.
In any other country with a high reliance on cash, that impact might be counter-intuitive. China's high mobile penetration and the years-long expansion of Ant Financial's Alipay and WeChat Pay mean 86% of the population use their phones to pay for everything from coffee and dining to movie tickets and ride-hailing.
Things are looking better in March after stores re-opened and people gradually went back to work, Mitchell said without giving specifics.
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