TikTok enters the world of finance, planning to compete with banks

TikTok is seeking to enter the financial sector and compete with banks, as it considers launching a new feature that would allow users to send money to each other via direct messages, a move that would bolster the app’s push to expand its financial services. According to Bloomberg, if launched, the feature would use TikTok Pay, currently available in Southeast Asia, to process transactions through the TikTok Shop. A TikTok spokesperson stated that the feature is not currently being tested in any market, indicating it remains in the early stages of development. Social media platforms are increasingly expanding their business models to include e-commerce, aiming to gather more data on consumers and their spending patterns. ByteDance, the Beijing-based company that operates TikTok globally and many of its key business units in the United States, has been moving into financial technology for years, developing and investing in its own payment tools to boost spending and engagement on the video app. Consumers worldwide spent more than $2.9 billion on TikTok this year, and the app has led the world in in-app purchase revenue since 2022, according to market research firm Sensor Tower. In the United States, users spend more on TikTok than on YouTube, Facebook, and Instagram.