Payments community considers impact of WeChat ban

An Executive Order dated August 6 prohibits “any transaction that is related to WeChat by any person, or with respect to any property, subject to the jurisdiction of the United States.” It takes effect in 45 days of the Order, and includes digital payments through WeChat.

Why should we care?
U.S. merchants in recent years have been adding WeChat payments to drum up business from Chinese nationals. Despite a small proportion of U.S. WeChat users, the ban could impact U.S. payments players. According to Krista Tedder, head of payments at Javelin Strategy & Research, the definition of transaction in the Order is broad, covering both monetary and data transactions. It could affect WeChat’s use anywhere in the world, given its links with payment processors, merchants, card networks, and U.S. banks with multinational customers, Tedder argues. “This is a sanctions requirement on steroids. With traditional sanctions, you can block a country, [and] deny service to specific companies or individuals. The banning of technology which is used globally has repercussions,” she wrote.