A counter promoting WeChat, a product of Tencent, is displayed at a news conference in Hong Kong. (Photo : Reuters)
Banks are losing out the battle to entice mobile payment users against Chinese Internet giants, according to a report by China Daily.
According to analysts and insiders, many users sent digital red envelopes as cash gifts using mobile technology during the Spring Festival.
Wang Weidong, a senior analyst at iResearch Consulting Group, told China Daily that online products such as the digital red envelopes have helped drive the use of mobile payment system.
He added that with the increasing popularity of mobile digital services, banks are expected to lose consumers to third-party payment service providers such as WeChat and Alipay.
The analyst said that this also includes customer services such as cash transfers and credit card payments.
According to China Daily, WeChat, the country's most widely used chatting app owned by Tencent, sent and received some 3.27 billion red envelopes from users between Feb. 18 and 23, with more than 1 billion of them conducted on Feb. 18 during the Lunar New Year's Eve.
As part of tradition to bring good luck during the Spring Festival, Chinese give away red envelopes as monetary gifts.
The report said that Alipay, China's largest online payment tool under Alibaba Group, had sent or received digital red envelopes from 100 million of its users during the Lunar New Year.
Qian Haili, an Internet finance analyst at the China e-Commerce Research Center, said that the digital red envelope used by Internet firms has effectively taught people on how to use mobile payments during Spring Festival.
The People's Bank of China, the central bank, noted the strong growth of mobile payments, which registered an increase in earnings by 134 percent year-on-year to 22.59 trillion yuan ($3.61 trillion) last year.
