17 April 2017
It’s reported1 that, during last year’s Chinese Spring Festival, 516 million people used the Chinese social media app WeChat to send 32 billion digital red packets over a 6-day period. (Red packets are traditionally given as gifts at Lunar New Year).

WeChat’s data2 shows that typical users send 28 red packets each month, totalling around AUD 110. Below is data showing the number of red packets sent on the day of Chinese holidays:



Money is transacted in Chinese Yuan and the sender and receiver both need a Chinese bank account (which is fairly easy to get). Although there are limitations3 for transactions, the information on the website is not clear.

Here’s how the WeChat wallet works:



Naturally the investigator in me has the following questions:
  • What effect will anti-money laundering legislation have on the operation of these apps? Especially if the data is housed overseas. 
  • Will regulators be able to access the data in the accounts?
  • What’s to stop businesses from using the apps for the purposes of bribery? Would people ever know? 
  • What’s to stop the use of these apps for other black/grey market transactions (eg. drug, arms trade, human trafficking)?
  • What’s to stop one user from creating multiple accounts and making numerous small transactions to hide a big transaction?
  • How would message encryption affect this service? Will it be possible to get to the chat history or payment history between the parties? 
  • Are the apps reliable? Can we trust the system?
The concept of mobile peer-to-peer payments is still fairly new. Currently, WeChat’s ‘wallet’ payment app is only available to users in China, Hong Kong and South Africa; and mobile peer-to-peer payments haven’t taken off yet in Australia, but companies like Facebook, Snapchat, and M-Pesa have introduced these features elsewhere, and they’ll surely grow in popularity. Mobile peer-to-peer payments are expected to top AUD350 billion worldwide in 20194

These apps are at our doorstep and may be another tool for fraudsters. So, ready or not, p2p is coming!

Endnotes
1. See: http://www.bbc.com/news/business-38746298 
2. See: http://blog.wechat.com/2016/12/29/the-2016-wechat-data-report/ 
3. See: https://help.wechat.com/cgi-bin/micromsg-bin/oshelpcenter?opcode=2&lang=en&plat=android&id=151207raMnAb151207Ufu6va&Channel=helpcenter
4. See: http://www.bbc.com/news/business-38746298