The 21st century is bringing some amazing changes to the world and one of them is, what is often called, the re-emergence of the Silk Road. In the last few decades, China has made progress by leaps and bounds, and its effects are seen across the world and across industries, especially the payment industry. Chinese payment methods such as Alipay and WeChat Pay are now household names and are pushing businesses and payment institutions to rethink payment strategies.
The making of a cashless generation
One of the first questions that arise is, why China? There are a few reasons why China is leading the next payment revolution.
High on unbanked population, low on payment infrastructure:
Traditionally Asian countries including China had and still have a much higher number of underbanked consumers relying exclusively on cash. The boom in the economy meant businesses needed to come up with solutions to engage these customers and manage payments without relying on commonly used (in the west) payment infrastructure such as cards.
Internet and mobile penetration:
With the internet boom came creative solutions such as PayPal (1998) and the emergence of QR (quick response) code. In China, QR code was given a second life when ecommerce giant Alibaba Group created Alipay allowing millions of mobile users to pay easily and conveniently.
Explosion and instant adoption of new age payments:
Since the internet revolution, China swiftly moved to become a cashless society in a matter of years. Alipay and WeChat Pay (embedded in WeChat app) now sit snugly in almost every mobile device in China, that’s more than 1 billion users! By contrast, Apple Pay has only 127 million users worldwide, even though it is installed into every iPhone. The use of these QR code payments is now ingrained in Chinese society with even beggars accepting QR payments!
So what, why should European businesses care?
It is easy to dismiss these dramatic changes happening in the far east for businesses in western countries. But with open channels across the world and the give and take of ideas via the new silk road, QR code payments are beginning to have greater importance in the western markets.
Millions of Chinese tourists in Europe
In 2017, more than 130 million mainland Chinese citizens travelled around the globe and their total spending overseas was around USD 115 billion. In Europe, Chinese travellers spent an average of USD 3,754 per person, excluding tour group fees and costs of transportation to and from the destination.
SafeCharge whitepaper, “Preparing your business to welcome Chinese shoppers” talks about Chinese travellers preferences and reasons for shopping abroad and provides an array of insights for businesses to understand why the travelling Chinese shoppers are important.
Businesses in the retail, travel and hospitality industry are already gearing up to create appeal for these tourists. Another large percentage of Chinese users of WeChat Pay and Alipay in Europe are the students. Overseas Chinese student spend $56 billion annually globally with per student spending $100,000. Even though universities are still thinking about accepting Alipay and WeChat Pay, businesses such as the iconic Camden Market in the UK and World Duty Free at Heathrow are already equipped with the payment methods to welcome their Chinese customers.
Making giants stop and notice
The impact of QR code payment is much larger than just about the Chinese shopper. Financial giants and traditional players are not only aware of it but are taking steps to promote QR code payments to make them more mainstream. EMVCo, the global standard association of EuroPay, MasterCard and Visa, has created a task force to work on the development of QR code payments.
The revolution that took root in China is forcing the western world to look up and notice. And it all started with the tiny QR code. Nowadays, it’s even embedded in your Linkedin profiles and comes as default in almost all smartphones.
The ease of payment and the convenience of the QR code is now being implemented by more and more payment methods. iDeal, the no.1 payment method in the Netherlands now offers a QR code payment option for its mobile users. With QR codes becoming more mainstream, it is safe to assume that in future every business will have to implement the infrastructure that can accept QR code payments.
Accepting Chinese payment methods
There are various ways that businesses can start accepting Chinese payment methods such as WeChat Pay and Alipay. The easiest and most popular option for merchants is to use one of WeChat or Alipay’s certified partners like SafeCharge. Applying through SafeCharge makes the process a lot smoother: there is no need for paperwork or dealing with documents in Chinese as we make the application on merchant’s behalf.
Businesses can easily set up Alipay and WeChat Pay using SafeCharge Checkout page, our ready to use Hosted Payment Page solution, or integrate it via RestAPI for businesses accepting payments directly on their payment pages. Yet another option is the SafeCharge Point of Sale app that works in parallel with your existing point of sale infrastructure. Chinese e-wallets open up possibilities for your business, all you have to do is offer it to the millions of potential customers out there.