Tencent agreed to integrate part of its authentication system for mobile transactions with state-owned rival UnionPay, Caixin Global reported, a move which increases the latter’s reach and advances a government aim for in-sector collaboration.

Once fully integrated, the partnership will allow users of China UnionPay’s QuickPass app to make payments using the same QR codes read by Tencent’s WeChat Pay platform.

This enables retailers to support a greater number of payment apps without having to display multiple QR codes and increases options for consumers. Rival Alipay uses a similar, but incompatible system.

Tencent and UnionPay will also reportedly collaborate on developing the use of facial recognition technology in mobile payment systems.

China’s mobile payment market is dominated by Ant Financial’s Alipay and brands owned by Tencent. However, in 2017 the country’s traditional banking sector upped its challenge by backing QuickPass, a system developed by main bank card supplier UnionPay.

Despite the new competition, the two dominant players are estimated by Caixin to hold more than 90 per cent of the mobile payments market.

As part of its three year plan for the development of the financial technology sector, in August 2019 the People’s Bank of China set out goals on adoption of integrated payment systems and coordination between players.